Description
Effect returns the effective annual interest rate based on the specified interest rate and the given 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
Effect returns the effective annual interest rate based on the specified interest rate and the given number of compounding periods.
Examples
Suppose you have a savings account that is advertising at 5% annual interest rate and pays interest monthly.
Effect (0.05, 12)
Returns 0.0512 (rounded to four decimal places) which corresponds to an effective interest rate of 5.12%.
Comments
This function is designed to work like the Excel function of the same name.