NOMINAL

Definition: NOMINAL is a function that returns the annual nominal interest rate given the effective rate and the number of compounding periods per year.

Syntax: =NOMINAL(effect_rate, npery)

Situation: This formula is appropriate when you need to find the annual nominal interest rate given the effective rate and the number of compounding periods per year.

Example: If you have an effective annual interest rate of 8% with quarterly compounding, the nominal rate can be found using the formula =NOMINAL(0.08, 4) which returns 0.0772 or 7.72%.