NOMINAL( ) function

Returns the annual nominal interest rate.

Syntax

NOMINAL(effective_rate, periods)

Parameters

effective_rate

Numeric. The effective annual interest rate.

periods

Numeric. The number of compounding periods per year.

Output

Numeric. The rate is calculated to eight decimals places.

Remarks

You can use this function to determine the nominal annual interest rate, given the effective rate and the number of compounding periods per year. For example, if you know the effective annual rate on your credit card, you can use it to find rate used to calculate interest monthly.

If the periods parameter includes decimals, the parameter is truncated to an integer value, not rounded.

This function is the opposite of EFFECTIVE( ).

Example

To calculate the nominal annual rate on a credit card with an effective annual rate of 19.56%:

NOMINAL(0.1956, 12) = 0.17998457

The nominal annual rate is 18%.

Related reference
EFFECTIVE( ) function


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