EFFECT()

Syntax. EFFECT(Nominal_Interest,Periods)

Definition. This function calculates the equivalent effective annual interest yield (in arrears), also called the conform interest rate, from the nominal interest rate (in arrears) that is distributed to different periods of the same length within a year. Even though this is uncommon, a different time unit can also be substituted for the year.

Arguments

  • Nominal_Interest (required) Returns the annual interest rate which, because of the distribution over the periods, is used for a respective intra-annual interest yield.

  • Periods (required) The number of interest days per year. This number is usually 2, 4, or 12.

Each argument must be evaluated as a number, otherwise, the #VALUE! error is displayed. The ...

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