Returns the effective annual interest rate, given the nominal annual interest rate and the number of compounding periods per year.
If this function is not available, and returns the #NAME? error, install and load the Analysis ToolPak addin.
How?
 On the Tools menu, click AddIns.
 In the AddIns available list, select the Analysis ToolPak box, and then click OK.
 If necessary, follow the instructions in the setup program.
Syntax
EFFECT(nominal_rate,npery)
Nominal_rate is the nominal interest rate.
Npery is the number of compounding periods per year.
Remarks
 Npery is truncated to an integer.
 If either argument is nonnumeric, EFFECT returns the #VALUE! error value.
 If nominal_rate ≤ 0 or if npery < 1, EFFECT returns the #NUM! error value.
 EFFECT is calculated as follows:
Example
The example may be easier to understand if you copy it to a blank worksheet.
How to copy an example
 Create a blank workbook or worksheet.
 Select the example in the Help topic.
Note Do not select the row or column headers.
Selecting an example from Help
 Press CTRL+C.
 In the worksheet, select cell A1, and press CTRL+V.
 To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

A 
B 
Data 
Description 
5.25% 
Nominal interest rate 
4 
Number of compounding periods per year 
Formula 
Description (Result) 
=EFFECT(A2,A3) 
Effective interest rate with the terms above (0.053543 or 5.3543 percent) 
