EFFECT

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

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

The following DAX query:

EVALUATE
{
  EFFECT(0.0525, 4)
}

Returns the effective interest rate using the terms specified above.