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Finance

  

effectiverate

  

convert a stated rate to the effective rate

 

Calling Sequence

Parameters

Description

Examples

Compatibility

Calling Sequence

effectiverate(stated_rate, nperiods)

Parameters

stated_rate

-

interest rate, expressed as a decimal number

nperiods

-

number of times the rate is compounded in the period

Description

• 

Continuous compounding is indicated by specifying infinity as the number of compounding periods.

• 

Since effectiverate used to be part of the (now deprecated) finance package, for compatibility with older worksheets, this command can also be called using finance[effectiverate]. However, it is recommended that you use the superseding package name, Finance, instead: Finance[effectiverate].

Examples

A given loan is at 12% compounded monthly. The effective rate is then 1% monthly compounded 12 times. One can calculate it as follows:

withFinance:

effectiverate0.12,12

0.126825030

(1)

or about 12.7%. This can also be seen as:

1+0.1212121

0.126825030

(2)

Compounded continuously, the effective rate is:

effectiverate0.12,∞

0.127496852

(3)

Compatibility

• 

The Finance[effectiverate] command was introduced in Maple 15.

• 

For more information on Maple 15 changes, see Updates in Maple 15.

See Also

examples,finance

Finance

 


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