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Finance[effectiverate] - convert a stated rate to the effective rate
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Calling Sequence
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effectiverate(stated_rate, nperiods)
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Parameters
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stated_rate
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interest rate, expressed as a decimal number
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nperiods
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number of times the rate is compounded in the period
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Description
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Continuous compounding is indicated by specifying infinity as the number of compounding periods.
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The command with(Finance,effectiverate) allows the use of the abbreviated form of this command.
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Since effectiverate used to be part of the (now deprecated) finance package, for compatibility with older worksheets, this command can also be called using finance[effectiverate]. However, it is recommended that you use the superseding package name, Finance, instead: Finance[effectiverate].
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Compatibility
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The Finance[effectiverate] command was introduced in Maple 15.
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Examples
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A given loan is at 12% compounded monthly. The effective rate is then 1% monthly compounded 12 times. One can calculate it as follows:
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>
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or about 12.7%. This can also be seen as:
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Compounded continuously, the effective rate is:
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