Description
Nominal returns the nominal annual interest rate given the effective interest rate and the number of compounding periods.
Arguments
rate is a number that specifies the annual interest rate.
nCompoundingPeriods is a positive number that specifies the number of compounding periods per year.
Action
Nominal returns the nominal annual interest rate given the effective interest rate and the number of compounding periods.
Examples
Suppose a new savings account is advertised with a compounding interest rate (or effective interest rate) of 4.02% on semiannual interest payments, which you want to compare with your existing account.
Nominal (0.0402, 2)
Returns 0.0398 (rounded to four decimal places) which corresponds to an annual interest rate of 3.98%.
Comments
This function is designed to work like the Excel function of the same name.