Finance
Find the true yearly rate (APY)
=EFFECT(B1,12)How it works in Excel
- B1 is the stated yearly rate.
- 12 is how many times a year interest is added.
- The result is always at least as high as the stated rate.
- NOMINAL converts the other way.
The idea in general
When interest earns interest during the year, you really get a little more than the stated rate.
What I assumed
- The stated yearly rate is in B1 and interest is added monthly.
Check the result on your own data before relying on it.