effrr

Effective rate of return

Syntax

Return = effrr(Rate,NumPeriods)

Description

Return = effrr(Rate,NumPeriods) calculates the annual effective rate of return. Compounding continuously returns Return equivalent to (e^Rate-1).

Examples

Compute the Annual Effective Rate of Return

This example shows how to find the effective annual rate of return based on an annual percentage rate of 9% compounded monthly.

Return = effrr(0.09, 12)

Return = 0.0938

Input Arguments

Rate — Annual percentage rate

scalar numeric decimal

Annual percentage rate, specified as a scalar numeric decimal.

Data Types: double

NumPeriods — Number of compounding periods per year

scalar integer

Number of compounding periods per year, specified as a scalar integer.

Data Types: double

Output Arguments

Return — Annual effective rate of return

scalar numeric decimal

Annual effective rate of return, returned as a scalar numeric decimal.