Calculates the effective annual interest rate for a given nominal annual interest rate and the number of compounding periods per year.
Składnia
EFFECT(nominal_rate, npery)Argumenty
nominal_ratewymagane
The nominal annual interest rate.
nperywymagane
The number of compounding periods per year.
The EFFECT function is used to determine the actual interest rate earned or paid on an investment or loan when compounding occurs multiple times per year. It converts a nominal rate into an effective annual rate, allowing for easier comparison between different financial products. The result is calculated using the formula: (1 + nominal_rate / npery) ^ npery - 1.
=EFFECT(0.06, 4)→0.06136355Calculates the effective rate for a 6% nominal rate compounded quarterly.
Select a cell
Click on the cell where you want to display the effective interest rate.
Enter the formula
Type =EFFECT(nominal_rate, npery) and replace the arguments with your specific values or cell references.
Excel will truncate the value to an integer.