NOMINAL

Returns the nominal annual interest rate, given the effective rate and the number of compounding periods per year.

If this function is not available, run the Setup program to install the Analysis ToolPak. After you install the Analysis ToolPak, you must enable it by using the Add-Ins command on the Tools menu.

Syntax

NOMINAL(effect_rate,npery)

Effect_rate   is the effective interest rate.

Npery   is the number of compounding periods per year.

Remarks

• Npery is truncated to an integer.
• If either argument is nonnumeric, NOMINAL returns the #VALUE! error value.
• If effect_rate £ 0 or if npery < 1, NOMINAL returns the #NUM! error value.
• NOMINAL is related to EFFECT as shown in the following equation:

  

Example

NOMINAL(5.3543%,4) equals 0.0525 or 5.25 percent