Financial
NOMINAL function: convert effective APY back to a stated annual rate (APR)
Find the stated nominal APR needed to hit a target effective annual yield under monthly or quarterly compounding using NOMINAL.
Reverse-engineer the Periodic Rate for PMT and FV
Savings certificates and European loans often quote an Effective Annual Rate (APY/EAR), whereas PMT and FV need the periodic rate (Nominal APR / npery). NOMINAL(effect_rate, npery) is the exact inverse of EFFECT: npery * ((1 + effect_rate)^(1 / npery) - 1).
These are mathematical conversions between nominal and effective interest rates. A regulated APR may include fees or other assumptions; do not substitute it automatically for the nominal input used here.
| Product (A) | EffectiveAPY (B) | Compounding (C) | NominalAPR |
|---|---|---|---|
| Savings APY | 0.12682503 | 12 | 0.1200 (12.00%) |
| Bond Yield | 0.08243216 | 4 | 0.0800 (8.00%) |
Convert APY to APR and verify round-trip with EFFECT
Passing 0.12682503 with 12 compounding periods returns 0.12 (12% APR). Feeding NOMINAL(B2, C2) back into EFFECT(..., C2) recovers the exact effective rate.
=ROUND(NOMINAL(B2, C2), 4)Domain boundaries (#NUM!)
NOMINAL requires effect_rate > 0 and npery >= 1; zero or negative rates or periods < 1 return #NUM!.
=NOMINAL(0, 12)Try the example
Use the original values or change them to test your understanding.