### Example: Effective Rate

In this example the effective interest rate is computed given that the nominal rate is 6.0% and that the interest will be compounded quarterly.
import com.imsl.finance.*;
import java.text.NumberFormat;
public class effectEx1 {
public static void main(String args[]) {
double nominalRate = .06;
int nper = 4;
double effectiveRate;
effectiveRate = Finance.effect(nominalRate, nper);
NumberFormat nf = NumberFormat.getPercentInstance();
nf.setMaximumFractionDigits(2);
System.out.println("The effective rate of the nominal rate, 6.0%, "
+ "compounded quarterly is " + nf.format(effectiveRate));
}
}

#### Output

The effective rate of the nominal rate, 6.0%, compounded quarterly is 6.14%

Link to Java source.