- effect_rate - The effective annual interest rate.
- npery - Number of compounding periods per year.
How to use
The Excel NOMINAL function calculates the nominal interest rate when given an effective annual interest rate and the number of compounding periods per year. Nominal interest rate is typically the stated rate on a financial product. Effective annual interest rate is the interest rate actually earned due to compounding. For example, with an effective rate of 6.14% and interest compounded quarterly, NOMINAL returns 6.00%:
=NOMINAL(0.0614,4) // returns 0.06
In the example shown, the formula in D6, copied down, is:
Format the result as a percentage to display with % symbol.
- Npery should be an integer (Excel will truncate if not).
- The effect_rate should be a number between 0 and 1.