Usage of Excel EFFECT function in Office 365!! {With Examples}
Tags: exceleffectfunctioni, excelfunctions, effectfunctioninexce, effectfunctioninoffi
Published: 2020-10-03 12:06:38

---
title: Usage of Excel EFFECT function in Office 365!! {With Examples}
published: true
date: 2020-10-03 07:06:54 UTC
tags: ExcelEFFECTfunctioni,ExcelFunctions,EFFECTFunctioninExce,EFFECTfunctioninOffi
canonical_url: https://geekexcel.com/usage-of-excel-effect-function-in-office-365-with-examples/
---

## Excel EFFECT Function:

![EFFECT Function](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/EFFECT-Function.png)<figcaption id="caption-attachment-15018">EFFECT Function</figcaption>

This article describes the description, basic syntax, and usage of the **Excel EFFECT function** in **Office 365**. Get an official version of **Microsoft Excel** from the following link: **[https://www.microsoft.com/en-in/microsoft-365/excel](https://www.microsoft.com/en-in/microsoft-365/excel).**
## EFFECT Function – Description:

- The Excel EFFECT function **calculates the effective annual interest rate for a specified nominal interest rate and the number of compounding periods for each year.**
- EFFECT is evaluated as follows:

![EFFECT formula](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/EFFECT-formula.png)<figcaption id="caption-attachment-15017">EFFECT formula</figcaption>

## Syntax of EFFECT Function:

```
=EFFECT(nominal\_rate, npery)
```

### **Argument Description:**

- **Nominal\_rate (Required)** – It is the nominal interest rate and must be a numeric value between 0 and 1.
- **Npery (Required)** – It is the number of compounding periods per year. It must be an integer.

### Important Note:

- [**#VALUE! Error**](https://geekexcel.com/how-to-fix-value-error-in-excel-office-365-with-example/) – The function returns the #VALUE! Error if any one of the input arguments contains a non-numeric character.
- [**#NUM! Error**](https://geekexcel.com/how-to-fix-num-error-in-excel-office-365-with-example/) – This error occurs if either the given **‘nominal\_rate’** argument is less than or equal to 0 or the supplied **‘npery’** argument is less than 1.

## Practical Examples:

Refer to the below examples of the **EFFECT function** and explore how to use it in Excel.

### **Example 1:**

- First, we need to enter the input values of the ‘nominal\_rate’ and ‘periods’.
- Here, we have entered the input into the cell range C5: D7.
- In this example, we have selected the input cells C5 and D5 to calculate the effective annual interest rate.
- Refer to the below syntax of the  **EFFECT function**  to return the output.

```
=EFFECT(C5,D5)
```

![Example 1](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/Example-1-3.png)<figcaption id="caption-attachment-15020">Example 1</figcaption>

- In order to execute the formula, you need to press the **Enter** key.

![Example 1 - Output](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/Example-1-Output-3.png)<figcaption id="caption-attachment-15019">Example 1 – Output</figcaption>

- Now, you can see the result in the F5 cell.
- For other input values, you just repeat the same procedure. In another way, you can just drag the cell F5 to F7 in order to return the respective output automatically.

### **Example 2:**

- The **[#VALUE! error](https://geekexcel.com/how-to-fix-value-error-in-excel-office-365-with-example/)** will be returned if **any one of the input arguments contains a non-numeric character**.

![Example 2](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/ApplicationFrameHost_E0ZJ7lbYgg.png)<figcaption id="caption-attachment-15027">Example 2</figcaption>

### **Example 3:**

- The **[#NUM! error](https://geekexcel.com/how-to-fix-num-error-in-excel-office-365-with-example/)** occurs if either the given **‘nominal\_rate’** argument is less than or equal to 0 or the supplied **‘npery’** argument is less than 1.

![Example 3](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/ApplicationFrameHost_hxOnu0ka4j.png)<figcaption id="caption-attachment-15028">Example 3</figcaption>

## Verdict:

In the above article, we have described the explanation, basic syntax, and usage of the **Excel EFFECT function in Office 365** with the examples. Use the function to evaluate the effective annual interest rate for the given inputs, nominal\_rate, and periods. Drop your valuable **queries/feedback** in the below comment section. Thanks for visiting **[Geek Excel!!](https://geekexcel.com/)** Keep Learning with us!!

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