Formula for EFFECT Function Incorrect in Help (149232)

The information in this article applies to:

Microsoft Excel for Windows 95 7.0a
Microsoft Excel for Windows 5.0c
Microsoft Excel for the Macintosh 5.0a

This article was previously published under Q149232

SYMPTOMS

In the versions of Microsoft Excel listed above, the online Help entries for the EFFECT and NOMINAL functions state that EFFECT is calculated using the following formula:

   EFFECT = ( 1 + Nominal_Rate / Npery ) ^ ( Npery - 1 )

MORE INFORMATION

This information is incorrect. The function is actually calculated using this formula:

   EFFECT = ( ( 1 + Nominal_Rate / Npery ) ^ Npery ) - 1

For more information about the EFFECT function, click the Index tab in Microsoft Excel Help, type the following text

EFFECT

and then double-click the selected text to go to the "EFFECT" topic.

Modification Type:	Minor	Last Reviewed:	10/10/2006
Keywords:	kbfix kbProgramming KB149232