Microsoft Office Tutorials and References
In Depth Information
Using NOMINAL to Convert the Effective Interest Rate to a Nominal Rate
Figure 13.9.
Figure 13.9. Row 5 shows the effective interest rates for various compound-
Row 5 shows the effective interest rates for various compound-
ing periods. Row 9 shows the monthly payment difference.
ing periods. Row 9 shows the monthly payment difference.
Using
Using NOMINAL
to Convert the Effective Interest Rate to a Nominal Rate
If you need to compare two investments, one quoting a nominal rate and one
quoting an effective rate, you can convert the effective rate to a nominal
rate by using NOMINAL.
NOMINAL to Convert the Effective Interest Rate to a Nominal Rate
Syntax
NOMINAL(effect_rate,npery)
The NOMINAL function returns the nominal annual interest rate, given the
effective rate and the number of compounding periods per year. This function
takes the following arguments:
effect_rate
effect_rate This is the effective interest rate.
npery
npery This is the number of compounding periods per year.
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