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#Financial

NOMINAL

Excel Functions

Get annual nominal interest rate

Syntax

EXCEL 
=NOMINAL(effect_rate, npery)

Arguments

Parameter Description
effect_rate The effective annual interest rate.
npery Number of compounding periods per year.

Return Value

Nominal interest rate

Details

The Excel NOMINAL function calculates the nominal interest rate when given an effective annual interest rate and the number of compounding periods per year. Nominal interest rate is typically the stated rate on a financial product. Effective annual interest rate is the interest rate actually earned due to compounding. For example, with an effective rate of 6.14% and interest compounded quarterly, NOMINAL returns 6.00%: In the example shown, the formula in D6, copied down, is: Format the result as a percentage to display with % symbol.

Examples

Example 1

The Excel NOMINAL function calculates the nominal interest rate when given an effective annual interest rate and the number of compounding periods per

EXCEL 
=NOMINAL(0.0614,4) // returns 0.06
Example 2

In the example shown, the formula in D6, copied down, is:

EXCEL 
=NOMINAL(B6,C6)

See Also

EFFECT