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.
