NOMINAL( ) function

Returns the nominal annual interest rate on a loan.

Syntax

NOMINAL(effective_rate, periods)

Parameters

Name	Type	Description
effective_rate	numeric	The effective annual interest rate.
periods	numeric	The number of compounding periods per year. Note Specify an integer. If you specified a decimal portion, it is truncated.

Output

Numeric. The rate is calculated to eight decimals places.

Examples

Basic examples

Returns 0.17998457 (18%), the nominal annual rate of interest on the unpaid balance of a credit card that charges an effective annual rate of 19.56%:

NOMINAL(0.1956, 12)

Remarks

What is the nominal interest rate?

The nominal annual interest rate on a loan is the stated or posted rate of interest, without taking into account interest on the remaining balance, compounded monthly or daily.

Related functions

The EFFECTIVE( ) function is the inverse of the NOMINAL( ) function.