EFFECT()

Description

Calculates the annual effective interest rate given the nominal rate and number of compounding periods per year.

How To Use in Sheets

EFFECT(nominal_rate, periods_per_year)

External Links

Google Sheets EFFECT Function | Calculate the Effective Interest Rate | How to Use EFFECT function

With the Google Sheets EFFECT function, you can calculate the effective interest rate for an investment or a loan. The nominal interest rate does not give you the actual return on an investment like the fixed deposit or from a savings account. In contrast, the effective interest rate gives you the actual return.

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