Effective rate of return
Return = effrr(Rate, NumPeriods)
Annual percentage rate. Enter as a decimal fraction.
Number of compounding periods per year, an integer.
Return = effrr(Rate, NumPeriods) calculates the annual effective rate of return. Compounding continuously returns Return equivalent to (e^Rate-1).
Find the effective annual rate of return based on an annual percentage rate of 9% compounded monthly.
Return = effrr(0.09, 12)
Return = 0.0938 or 9.38%