The EFFECT function returns the effective annual interest rate.

EFFECT takes 2 required arguments and no optional arguments:

Syntax: EFFECT(nominal_rate, npery)

#1)
Using the EFFECT function:
#2)
The arguments for the EFFECT function are:
Argument Required? Description
nominal_rate Required The nominal interest rate.
npery Required The number of compounding periods per year.
#3)
A few more things:
npery is truncated to an integer.
If either argument is nonnumeric, EFFECT returns the #VALUE! error value.
If npery ≤ 0 or if npery < 1, EFFECT returns the #NUM! error value.
EFFECT (nominal_rate,npery) is related to NOMINAL(effect_rate,npery) through effective_rate=(1+(nominal_rate/npery))*npery -1.

Summary

The EFFECT function returns the the effective annual interest rate.
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