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.
Purpose
Return value
Syntax
=NPER(rate,pmt,pv,[fv],[type])
- rate - The interest rate per period.
- pmt - The payment made each period.
- pv - The present value, or total value of all payments now.
- fv - [optional] The future value, or a cash balance you want after the last payment is made. Defaults to 0.
- type - [optional] When payments are due. 0 = end of period. 1 = beginning of period. Default is 0.
Using the NPER function
You can use the NPER function to get the number of payment periods for a loan (or an investment), given the amount, the interest rate, and a periodic payment amount.
Notes
- pmt normally includes principal and interest but not taxes, reserve payments, or fees.
- Be sure you supply rate consistent with periods. For example, if an annual interest rate is 12 percent, use 12%/12 for rate to get NPER to return periods in months.
