effrr (Financial Toolbox)

effrr
Effective rate of return

Syntax

Return = effrr(Rate, NumPeriods)

Arguments

Rate
Annual percentage rate. Enter as a decimal fraction.

NumPeriods
Number of compounding periods per year, an integer.

`Rate`	Annual percentage rate. Enter as a decimal fraction.
`NumPeriods`	Number of compounding periods per year, an integer.

Description
Return = effrr(Rate, NumPeriods) calculates the annual effective rate of return. Compounding continuously returns Return equivalent to (e^Rate-1).

Examples
Find the effective annual rate of return based on an annual percentage rate of 9% compounded monthly.

Return = effrr(0.09, 12)

returns

Return =
         0.0938 or 9.38%

See Also
nomrr

discrate eomdate