Purpose
Return value
Syntax
=MIRR(values,finance_rate,reinvest_rate)
- values - Array or reference to cells that contain cash flows.
- finance_rate - Required rate of return (discount rate) as percentage.
- reinvest_rate - Interest rate received on cash flows reinvested as percentage.
Using the MIRR function
The standard Internal rate of return function (IRR) assumes all cash flows are reinvested at the same rate as the IRR. The modified internal rate of return function (MIRR) accepts both the cost of investment (discount rate) and a reinvestment rate for cash flows received.
In the example shown, the formula in F6 is:
=MIRR(B5:B11,F4,F4)
In this example, we assume that the reinvestment rate is the same as the cost of capital, so we set both the finance_rate and reinvest_rate to the value in F4, which is 10%.
Notes
- The values array must contain at least one positive value and one negative value.
- Values should be in chronological order.
- MIRR assumes cash flows at regular periods.
Purpose
Return value
Syntax
=NOMINAL(effect_rate,npery)
- effect_rate - The effective annual interest rate.
- npery - Number of compounding periods per year.
Using the NOMINAL function
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%:
=NOMINAL(0.0614,4) // returns 0.06
In the example shown, the formula in D6, copied down, is:
=NOMINAL(B6,C6)
Format the result as a percentage to display with % symbol.
Notes
- Npery should be an integer (Excel will truncate if not).
- The effect_rate should be a number between 0 and 1.
