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EFFECT

  • Article

Applies to: Calculated column Calculated table Measure Visual calculation

Returns the effective annual interest rate, given the nominal annual interest rate and the number of compounding periods per year.

Syntax

EFFECT(<nominal_rate>, <npery>)

Parameters

Term Definition
nominal_rate The nominal interest rate.
npery The number of compounding periods per year.

Return Value

The effective annual interest rate.

Remarks

  • EFFECT is calculated as follows:

    $$\text{EFFECT} = \bigg( 1 + \frac{\text{nominal_rate}}{\text{npery}} \bigg)^{\text{npery}} - 1$$

  • npery is rounded to the nearest integer.

  • An error is returned if:

    • nominal_rate ≤ 0.
    • npery < 1.

  • This function is not supported for use in DirectQuery mode when used in calculated columns or row-level security (RLS) rules.

Example

Data Description
5.25% Nominal interest rate
4 Number of compounding periods per year

The following DAX query:

EVALUATE
{
  EFFECT(0.0525, 4)
}

Returns the effective interest rate using the terms specified above.

[Value]
0.0535426673707584