The EFFRATE function
returns the effective annual interest rate. The function computes
the effective annual interest rate that corresponds to a nominal annual
interest rate.
The following details
apply to the EFFRATE function:

The values for rates must be at
least –99.

In considering a nominal interest
rate and a compounding interval, if
compoundinginterval is 'CONTINUOUS', then the value that is returned by EFFRATE equals
e^{rate/100}–1.
If
compoundinginterval is not 'CONTINUOUS', and
m compounding intervals occur in a year, the
value that is returned by EFFRATE equals
(1+[rate/100 m])^{m–1}.

The following values are valid
for
compoundinginterval:

If the interval is 'DAY', then
m=365.