19. Calculating Effective Rates of Return Lenders, like banks, often advertise a stated (or nominal rate) but multiple compounding periods during the year cause the effective interest rate to be much higher. NOM% EFF%= (2+) )". where m represents the number of compounding periods per year, NOM% is the nominal (or stated) rate, and EFF% is the effective annual rate. Press 2ND [ICONV] to access the interest rate conversion function. Think of the function as a three-item list that you will enter two values into and compute the remaining value. The list is arranged like this: C/Y compounding periods per year NOM nominal interest rate EFF effective annual rate A bank advertises that customers can borrow money for only 6% interest. However, the loan would be compounded monthly, so what is the effective interest rate on the loan? Loan Effective Annual Rate -1