NOMINAL

float nominal(float effective_interest_rate, integer compounding_periods_per_year)

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

effective_interest_rate > 0 is the effective annual interest rate.

compounding_periods_per_year >= 1 is the number of times in a whole year that interest is added to the principal.

The nominal and effective interest rates are related by the equation

effect = - 1 + (1 + nominal / compounding_periods_per_year)^compounding_periods_per_year

Example

=nominal(2.524%, 4)

» 2.5%.