NOMINAL function

This article describes the formula syntax and usage of the NOMINALfunction in Microsoft Excel.

Description

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

Syntax

NOMINAL(effect_rate, npery)

The NOMINAL function syntax has the following arguments:

  • Effect_rate    Required. The effective interest rate.

  • Npery    Required. The number of compounding periods per year.

Remarks

  • Npery is truncated to an integer.

  • If either argument is nonnumeric, NOMINAL returns the #VALUE! error value.

  • If effect_rate ≤ 0 or if npery < 1, NOMINAL returns the #NUM! error value.

  • NOMINAL (effect_rate,npery) is related to EFFECT(nominal_rate,npery) through effective_rate=(1+(nominal_rate/npery))*npery -1.

  • The relationship between NOMINAL and EFFECT is shown in the following equation:

    Equation

Example

The example may be easier to understand if you copy it to a blank worksheet.

How do I copy an example?

  1. Select the example in this article. If you are copying the example in Excel Web App, copy and paste one cell at a time.Important Do not select the row or column headers.

    selecting an example from help

    Selecting an example from Help

  2. Press CTRL+C.

  3. Create a blank workbook or worksheet.

  4. In the worksheet, select cell A1, and press CTRL+V. If you are working in Excel Web App, repeat copying and pasting for each cell in the example.

  5. Important For the example to work properly, you must paste it into cell A1 of the worksheet.

  6. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

  7. After you copy the example to a blank worksheet, you can adapt it to suit your needs.

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2

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A

B

Data

Description

5.3543%

Effective interest rate

4

Number of compounding periods per year

Formula

Description (Result)

=NOMINAL(A2,A3)

Nominal interest rate with the terms above (0.0525 or 5.25 percent)

Applies To: Excel 2010, Excel Starter, Excel Online, SharePoint Online



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