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hi friends the effect function is used to calculate the effective annual interest rate for a given nominal interest rate and number of compounding periods per year letamp;#39;s go ahead and see how you can use the effect function in Microsoft Excel open the desired Excel worksheet here for demo purpose we are using a worksheet ing to the effect function the effect function syntax has the following arguments the nominal interest rate the number of compounding periods per year we are also showing you the description of the function we are going to use here select the cell where you want to get the functions result type equals effect open parenthesis select the cell that contains the nominal interest rate comma select the cell that contains the number of compounding periods per year close parenthesis and then press the Enter key it will show the result ing to the description next to it I hope this was easy to follow thanks for watching for more details click on the I icon on the top righ