Returns the effective annual interest rate, given the nominal annual interest rate and the number of compounding periods per year.
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.
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Note Do not select the row or column headers.
Selecting an example from Help
 Press CTRL+C.
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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) 
