I. Intro
The EFFECT function calculates the effective annual interest rate based on the nominal annual rate and the number of compounding periods per year.
II. About the function
- Formula: =EFFECT(nominal_rate, periods_per_year)
- Arguments:
- nominal_rate (required): The nominal annual interest rate.
- periods_per_year (required): The number of compounding periods per year.
- Example: =EFFECT(3%,12)
III. Steps
Use the EFFECT function
- Select a cell and enter =EFFECT.
- Enter the arguments in the cell: For example: =EFFECT(A2,B2).
- Press Enter to get the result.
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Delete the EFFECT function
Select the cell with the EFFECT function and press Delete.