Power Pivot Principles: The A to Z of DAX Functions – EFFECT
25 July 2023
In our long-established Power Pivot Principles articles, we continue our series on the A to Z of Data Analysis eXpression (DAX) functions. This week, we look at EFFECT.
The EFFECT function
Does DAX sometimes not have the desired EFFECT? This function returns the effective annual interest rate, given the nominal annual interest rate and the number of compounding periods per year.
It employs the following syntax:
It has two  arguments in the syntax:
- nominal_rate: this is required and represents the nominal interest rate
- npery: this is required and represents the number of compounding periods per year.
There are a few remarks for this function:
- EFFECT which is short of the effective rate is calculated as follows:
- the npery argument is rounded to the nearest integer
- an error is returned if:
- nominal_rate ≤ 0
- npery < 1
- the EFFECT function is not compatible with Power Pivot and currently it is only compatible with Power BI, SSAS Tabular, Azure AS and SSDT
- this function is not supported for use in DirectQuery mode when used in calculated columns or row-level security (RLS) rules.
Consider a nominal interest rate of 5% and our npery is 12 months. Therefore, we will write the following DAX code to convert the nominal rate into the effective rate:
We will have the following figure:
This is the effective rate after compounding twelve  times a year.
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