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>EFFECT</A
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>Name</H2
>EFFECT&nbsp;--&nbsp;</DIV
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>Synopsis</H2
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>EFFECT(r,nper)</PRE
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>Description</H2
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>EFFECT calculates the effective interest rate from a given nominal rate.</P
><P
>Effective interest rate is calculated using this formulae:</P
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><P
>         r( 1 + ------ ) ^ nper - 1       nper</P
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>where:</P
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>@r = nominal interest rate (stated in yearly terms)</P
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>@nper = number of periods used for compounding</P
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>For example credit cards will list an APR (annual percentage rate) which is a nominal interest rate.</P
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>For example if you wanted to find out how much you are actually paying interest on your credit card that states an APR of 19% that is compounded monthly you would type in:</P
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>=EFFECT(.19,12) and you would get .2075 or 20.75%. That is the effective percentage you will pay on your loan.</P
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>See also</H2
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>        <A
HREF="r2394.html#GNUMERIC-NOMINAL"
>NOMINAL</A
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