The Excel NOMINAL Function
Related Function:EFFECT Function
The Excel Nominal function returns the nominal interest rate for a given effective interest rate and number of compounding periods per year.
The syntax of the function is:
NOMINAL( effect_rate, npery )
where the arguments are as follows:
|effect_rate||-||The effective interest rate (a numerical value, between 0 and 1).|
|npery||-||The number of compounding periods per year (must be a positive integer).|
Nominal Function Examples
In the following spreadsheet, the Excel Nominal function in used to calculate the nominal interest rate of three loans with different terms.
|1||=NOMINAL( 10%, 4 )|
|2||=NOMINAL( 10%, 2 )|
|3||=NOMINAL( 2.5%, 12 )|
Formatting the Result as a Percentage
If the result from your Nominal function is displayed as a decimal, or shows 0%, both of these problems are likely to be due to the formatting of the cell containing the function.
Therefore the problem can be fixed by formatting the cell as a percentage, with decimal places.
To do this:
- Select the cell(s) to be formatted as a percentage.
Open up the 'Format Cells' dialog box using any one of the following methods:
- Right-click on the selected cell or range and select the Format Cells ... option from the right-click menu;
- Click on the dialog box launcher in the Number grouping within the Home tab of the Excel ribbon (see rightabove);
- Use the keyboard shortcut CTRL-1 (i.e. Select the CTRL key and while holding this down, select the "1" (one) key).
Within the 'Format Cells' dialog box:
Further details and examples of the Excel Nominal function are provided on the Microsoft Office website.
Nominal Function Errors
If you get an error from the Excel Nominal function this is likely to be one of the following:
Occurs if either:
- The supplied effect_rate is ≤ 0
- The supplied npery is < 1.
|#VALUE!||-||Occurs if one or both of the supplied arguments are non-numeric.|