EFFECT

Returns the effective annual interest rate

Syntax

EFFECT(nominal_rate, npery)

Arguments

Argument	Description	Required
nominal_rate	The nominal interest rate	Required
npery	The number of compounding periods per year	Required

Examples

Effective rate with semi-annual compounding

Effective rate with quarterly compounding

Effective rate from cell values

Related Functions

Other Financial functions:

• CUMIPMT - Returns the cumulative interest paid between start_period and end_period
• CUMPRINC - Returns the cumulative principal paid on a loan between start_period and end_period
• DB - Returns the depreciation of an asset for a specified period using the fixed-declining balance method
• DISC - Returns the discount rate for a security
• FV - Returns the future value of an investment.
• FVSCHEDULE - Returns the future value of an initial principal after applying a series of compound interest rates
• IPMT - Returns the interest payment for a given period for an investment based on periodic, constant payments and a constant interest rate.
• IRR - Returns the internal rate of return for a series of cash flows
• NOMINAL - Returns the annual nominal interest rate
• NPER - Returns the number of periods for an investment
• NPV - Calculates the net present value of a series of cash flows at a given discount rate
• PMT - Calculates the payment for a loan based on constant payments and a constant interest rate.
• PPMT - Returns the payment on the principal for a given period for an investment based on periodic, constant payments and a constant interest rate.
• PV - Returns the present value of an investment.
• RATE - Returns the interest rate per period of a loan or investment.
• SLN - Returns the straight-line depreciation of an asset for one period
• XIRR - Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic
• XNPV - Returns the net present value for a schedule of cash flows that is not necessarily periodic

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