NOMINAL
The nominal annual rate of an effective rate compounded a number of times a year.
Group: Financial. Compatible with DAX.
Syntax
NOMINAL ( <effect_rate>, <npery> )| Parameter | Type | Description |
|---|---|---|
effect_rate | Number | The effective yearly rate, as a decimal. |
npery | Number | How many times a year interest is added. |
Returns
Number. The quoted yearly rate that, compounded npery times, earns the effective rate.
Remarks
- The inverse of
EFFECT: npery × ((1 + effect_rate) ^ (1 / npery) − 1). - The number of periods a year is rounded to a whole number. A rate of 0 or less, or fewer than one period a year, is an error.
Examples
The quoted rate behind 4.6 % effective
The more often interest is added, the lower the quoted rate needed to earn 4.6 % in a year.
EVALUATE
ROW (
"Quarterly", NOMINAL ( 0.046, 4 ),
"Monthly", NOMINAL ( 0.046, 12 )
)| Quarterly | Monthly |
|---|---|
| 0.0452271412985406 | 0.0450577461737538 |