First we calculate Nominal Interest Rate using Rate Function in Excel:

=rate(nper,pmt,-pv,fv)*12

Here,

Rate = Nominal Interest Rate = ?

Nper = 30 months

PMT = 0

PV = $5,000

FV = $6,450

Substituting the values in formula:

=rate(30,0,-5000,6450)*12

Rate or Nominal Interest Rate = 10.23%

Now we calculate Effective Rate of Return:

Effective Rate of Return = (1+i/n)^n - 1

Here,

i = Nominal Interst Rate = 10.23%

n = Number of Compounding Periods = 12

Effective Rate of Return = (1+10.23%/12)^12 - 1 = 10.72%