Difference between revisions of "Documentation/How Tos/Calc: EFFECT ADD function"

From Apache OpenOffice Wiki
Jump to: navigation, search
m (Robot: Automated text replacement %s)
m
 
(6 intermediate revisions by 4 users not shown)
Line 1: Line 1:
−
__NOTOC__
+
{{DISPLAYTITLE: EFFECT_ADD function}}
 +
{{Documentation/CalcFunc FinancialTOC
 +
|ShowPrevNext=block
 +
|PrevPage=Documentation/How_Tos/Calc:_EFFECTIVE_function
 +
|NextPage=Documentation/How_Tos/Calc:_INTRATE_function
 +
}}__NOTOC__
  
 
== EFFECT_ADD ==
 
== EFFECT_ADD ==
Line 19: Line 24:
 
:  returns approximately <tt>'''0.0614'''</tt>, which is the effective rate of an investment with a nominal rate of 6% per annum, compounded quarterly.
 
:  returns approximately <tt>'''0.0614'''</tt>, which is the effective rate of an investment with a nominal rate of 6% per annum, compounded quarterly.
  
−
{{Documentation/SeeAlso|
+
=== Issues: ===
 +
* According to the draft ODFF standard, this function will be replaced with a new '''EFFECT''' function.
 +
* The calculation assumes that interest is credited at the end of exactly equal periods. In reality, different quarter-years, for example, have different numbers of days.
 +
 
 +
{{SeeAlso|EN|
 
* [[Documentation/How_Tos/Calc: EFFECTIVE function|EFFECTIVE]]
 
* [[Documentation/How_Tos/Calc: EFFECTIVE function|EFFECTIVE]]
 
* [[Documentation/How_Tos/Calc: NOMINAL function|NOMINAL]]
 
* [[Documentation/How_Tos/Calc: NOMINAL function|NOMINAL]]
Line 30: Line 39:
 
* [[Documentation/How_Tos/Calc: Functions listed alphabetically|Functions listed alphabetically]]
 
* [[Documentation/How_Tos/Calc: Functions listed alphabetically|Functions listed alphabetically]]
 
* [[Documentation/How_Tos/Calc: Functions listed by category|Functions listed by category]]}}
 
* [[Documentation/How_Tos/Calc: Functions listed by category|Functions listed by category]]}}
−
 
+
[[Category: Documentation/Reference/Calc/Financial functions]]
−
=== Issues: ===
+
−
* According to the draft ODFF standard, this function will be replaced with a new '''EFFECT''' function.
+
−
* The calculation assumes that interest is credited at the end of exactly equal periods. In reality different quarter-years, for example, have different numbers of days.
+

Latest revision as of 10:55, 31 January 2024

EFFECT_ADD

Returns the effective compounded interest rate given a nominal interest rate.

Syntax:

EFFECT_ADD(nom_rate; num)

nom_rate: the nominal interest rate.
num: the number of times interest is credited / compounded during the period that nom_rate applies to.
If an investment has a nominal rate, say for a year, but interest is paid and credited say each quarter, the interest paid each quarter will itself start earning interest. This increases the effective value. This function returns the effective rate - that is, the rate that would have to be paid at the end of the (say) year to give the same return.
The formula used is:
effective_rate = (1 + nom_rate/num)num - 1

Example:

EFFECT_ADD(0.06; 4)

returns approximately 0.0614, which is the effective rate of an investment with a nominal rate of 6% per annum, compounded quarterly.

Issues:

  • According to the draft ODFF standard, this function will be replaced with a new EFFECT function.
  • The calculation assumes that interest is credited at the end of exactly equal periods. In reality, different quarter-years, for example, have different numbers of days.


See Also
Retrieved from "https://wiki.openoffice.org/w/index.php?title=Documentation/How_Tos/Calc:_EFFECT_ADD_function&oldid=259759"
Views
Personal tools
Navigation
Tools
In other languages