Microsoft Office Tutorials and References

In Depth Information

**NOMINAL**

Figure 6.23

Use
MIRR
to determine

the modified internal

rate of return for several

periodic cash flows.

A

The function

built with cell

referencing

NOMINAL

NOMINAL
returns the nominal annual interest rate given an effective rate and the total number

of compounding periods for the year.

=NOMINAL(effective_rate,npery)

The
NOMINAL
function is found only if the Analysis Toolpak is installed. It must be turned on

using the Add-Ins command from the Tools menu.

The effective interest rate.

EFFECT_RATE

The number of coumpounding periods over the year.

NPERY

NOMINAL
is calculated as follows:

Note the following example:

For example:
=NOMINAL(6.2%,4)
would return the result of .060%.

NPE
NPER
returns the total number of periods for an investment. This is based on a periodic

constant payment and a constant interest rate.

=NPER(rate,pmt,pv,fv,type)

Notice the example in Figure 6.24. The interest rate is 3%, the payment per period is $350.

The current present value is $11,500. The future value of the loan, or the amount you want to