Evaluates the nominal annual interest rate.
Synopsis
#include <imsl.h>
float imsl_f_nominal_rate (float effective_rate, int n_periods)
The type double function is imsl_d_nominal_rate.
Required Arguments
float
effective_rate (Input)
The amount of interest that would
be charged if the interest was paid in a single lump sum at the end of the
loan.
int n_periods
(Input)
Number of compounding periods per year.
Return Value
The nominal annual interest rate. If no result can be computed, NaN is returned.
Description
Function imsl_f_nominal_rate computes the nominal annual interest rate. The nominal interest rate is the interest rate as stated on the face of a security.
It is computed using the following:
Example
In this example, imsl_f_nominal_rate computes the nominal annual interest rate of the effective interest rate, 6.14%, compounded quarterly.
#include <stdio.h>
#include "imsl.h"
void main()
{
double effective_rate = .0614;
int n_periods = 4;
double nominal_rate;
nominal_rate = imsl_d_nominal_rate (effective_rate, n_periods);
printf ("The nominal rate of the effective rate, 6.14%%, \n");
printf ("compounded quarterly is %.2f%%.\n", nominal_rate * 100.);
}
Output
The nominal rate of the effective rate, 6.14%,
compounded quarterly is 6.00%.
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