Add EFFECT formula

README.md

@@ -32,6 +32,16 @@ To use Exonio you just have to call the method you like to use. Example:
 
 ## Available Formulas
 
+### EFFECT
+
+The Excel EFFECT function returns the effective annual interest rate, given a nominal interest rate and the number of compounding periods per year. 
+Effective annual interest rate is the interest rate actually earned due to compounding.
+More about this function [EFFECT](https://exceljet.net/excel-functions/excel-effect-function)
+
+```ruby
+Exonio.effect(0.05, 10 * 12) # ==> 0.05126014873337037
+```
+
 ### FV
 
 What is the future value after 10 years of saving $100 now, with

lib/exonio/financial.rb

@@ -1,5 +1,22 @@
 module Exonio
   module Financial
+    # Calculates the effective annual interest rate, given a nominal interest rate and the number of
+    # compounding periods. Nominal interest rate is the stated rate on the financial product.
+    # Effective annual interest rate is the interest rate actually earned due to compounding.
+    # constant-amount periodic payments and a constant interest rate.
+    #
+    # @param rate [Float] The nominal interest rate as decimal (not per cent) per period
+    # @param nper [Integer] The number of compounding periods
+    #
+    # @return [Float]
+    #
+    # @example
+    #   Exonio.effect(0.05, 12 * 10) # ==> 0.05126014873337037
+    #
+    def effect(rate, nper)
+      (1 + rate / nper) ** nper - 1
+    end
+
     # Calculates the future value of an annuity investment based on
     # constant-amount periodic payments and a constant interest rate.
     #

spec/financial_spec.rb

@@ -2,6 +2,17 @@
 require 'bigdecimal'
 
 describe Exonio::Financial do
+  describe '#effect' do
+    let(:rate) { 0.05 }
+    let(:nper) { 12 * 10 }
+
+    it 'computes effect with default arguments' do
+      results = Exonio.effect(rate, nper)
+
+      expect(results).to eq(0.05126014873337037)
+    end
+  end
+
   describe '#fv' do
     let(:rate) { 0.05 / 12 }
     let(:nper) { 12 * 10 }