XLeratorDB/financial Documentation
EFFECT
Updated: 5 August 2010
Use EFFECT to calculate the effective annual interest rate.
Syntax
SELECT [westclintech].[wct].[EFFECT] (
<@Nominal_rate, float,>
,<@Npery, int,>)
Arguments
@Nominal_rate
the stated rate of interest. @Nominal_rate is an expression of type float or of a type that can be implicitly converted to float.
@Npery
the number of times per year that @Nominal_rate is paid. @Npery is an expression of type float or of a type that can be implicitly converted to float.
Return Type
float
Remarks
· @Npery is truncated to an integer
· If @Nominal_rate <= 0 or if @Npery <= 0 then EFFECT returns an error
· EFFECT is calculated using the following formula:
EFFECT = ((1+@Nominal_rate/@Npery)^@Npery)-1
Examples
SELECT wct.EFFECT (0.04
, 12)
Here is the result set
----------------------
0.0407415429197906