Thanks for your interest and information which is appreciated.
--
David B


" wrote:

David B wrote:
I have an example where the annual compounded rate
is 7.3% and this is stated as a monthly rate of 0.592%
and I would like to be able to calculate that. Using
your formula gives 0.589%. I see your point about
about daily interest charging, is there any way I can
fine tune the formula to give the 0.592% result?

First, I hasten to note that it is very rare when I can
reverse-engineer the computation and get __exactly__ the
same result as a financial institution. Who knows why!
Perhaps due to "exact" computation based on iteration
and intermediaterouding to their units -- pennies,
"centipennies", etc -- compared to exponential and log
functions that might be used in the implementation of
Excel's present value functions (just a guess).

Second, my gutt reaction was: a difference of 0.003%
is "close enough for government work". But I must
admit that it can make a difference of about $8941 on
an investment of $100,000 over 30 years. Then again,
that difference is less than 1.1%. A 98.9% solution
is usually good enough for most people.

Nonetheless, I can understand your curiosity. I look
for explanations of differences of pennies, just to be
sure I truly understand the process.

At this point, I can only guess ....

I might have misled you by asserting that the APR is
7.3%. Perhaps 7.3% is the nominal rate, and the APR
is actually 7.34%.

The estute reader will note that that is not what the
EFFECT() function would return. The answer might be
that the OP is talking about a loan or something similar,
and the APR includes other fees. For an explanation,
do a google search on "how is apr calculated" (without
the quotations). For example, see
http://www.realestateabc.com/insights/apr.htm .

HTH.