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Financial function

NOMINAL

Returns the nominal annual rate given an effective rate.

Rarely usedDifficulty 1350 · AdvancedUsage rank #327 of 520
Practice · 2 questions →

When to use it

The nominal annual rate given an effective rate and the compounding periods per year.

The shape of it

Syntax
=NOMINAL(effect_rate, npery)

Worked examples

  • Monthly

    =NOMINAL(0.0617,12) → 6.00%

    Back from monthly compounding.

  • Quarterly

    =NOMINAL(0.061364,4) → 6.00%

    Back from quarterly.

  • Semiannual

    =NOMINAL(0.05,2) → 4.94%

    A 5% effective rate compounded twice a year.

Worth knowing

  • Nominal/periods is the rate per period to use in PMT.
  • EFFECT reverses it.
  • Quoted APRs are usually nominal.

Where it goes wrong

  • #NUM! for a rate of 0 or less, or periods below 1.
  • Non-integer periods are truncated.

Related

PMTNPVIRRIPMTPPMTPV

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