XL: Formula for EFFECT Function Incorrect in Help

ID: Q149232

The information in this article applies to:

Microsoft Excel for Windows, versions 5.0, 5.0c
Microsoft Excel for the Macintosh, versions 5.0, 5.0a
Microsoft Excel for Windows 95, versions 7.0, 7.0a

SYMPTOMS

In the versions of Microsoft Excel listed above, the online Help entries for the EFFECT and NOMINAL functions state that EFFECT is calculated using the following formula:

   EFFECT = ( 1 + Nominal_Rate / Npery ) ^ ( Npery - 1 )

MORE INFORMATION

This information is incorrect. The function is actually calculated using this formula:

   EFFECT = ( ( 1 + Nominal_Rate / Npery ) ^ Npery ) - 1

For more information about the EFFECT function, click the Index tab in Microsoft Excel Help, type the following text

   EFFECT

and then double-click the selected text to go to the "EFFECT" topic.

Additional query words: 5.00 5.00a 5.00c 7.00 7.00a XL5 XL7

Keywords          : kbprg PgmOthr 
Version           : WINDOWS:5.x,7.0; MACINTOSH:5.0,5.0a
Platform          : MACINTOSH WINDOWS
Solution Type     : kbfix

Last Reviewed: December 2, 1997