convert a stated rate to the effective rate - Maple Help

Online Help

All Products    Maple    MapleSim


Home : Support : Online Help : Mathematics : Finance : Personal Finance : Finance/effectiverate

Finance[effectiverate] - convert a stated rate to the effective rate

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)

See Also

examples,finance, Finance


Download Help Document

Was this information helpful?



Please add your Comment (Optional)
E-mail Address (Optional)
What is ? This question helps us to combat spam