NOMINAL Function Explained
The NOMINAL function in Microsoft Excel calculates the nominal interest rate for a given effective rate and number of compounding periods per year. It takes two arguments: the effect_rate and the npery. The effect_rate is the effective interest rate, and the npery is the number of compounding periods per year. The NOMINAL function returns the nominal interest rate.
NOMINAL Function Syntax
NOMINAL(settlement, maturity, rate, [basis])
- settlement: The security’s settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.
- maturity: The security’s maturity date. The maturity date is the date when the security expires.
- rate: The security’s annual coupon rate.
- basis: (Optional) The type of day count basis to use. The default value is 0 (US (NASD) 30/360).