RATE

Excel Functions

Get the interest rate per period of an annuity

Syntax

EXCEL

=RATE(nper, pmt, pv, [fv], [type], [guess])

Arguments

Parameter	Description
`nper`	The total number of payment periods.
`pmt`	The payment made each period.
`pv`	The present value, or total value of all loan payments now.
`fv`	[optional] The future value, or desired cash balance after last payment. Default is 0.
`type`	[optional] When payments are due. 0 = end of period. 1 = beginning of period. Default is 0.
`guess`	[optional] Your guess on the rate. Default is 10%.

Return Value

The interest rate per period

Details

The RATE function returns the interest rate per period of an annuity. You can use RATE to calculate the periodic interest rate, then multiply as required to derive an annual interest rate. The RATE function is commonly multiplied by 12 to arrive at an annual rate. The RATE function takes six arguments, the first three of which are required: To calculate the annual interest rate for a $5000 loan with payments of $93.22 per month over 5 years, you can use RATE in a formula like this: In the example shown, the formula in C10 is: Notice the value for pmt from C6 is entered as a negative value.

Examples

Example

To calculate the annual interest rate for a $5000 loan with payments of $93.22 per month over 5 years, you can use RATE in a formula like this:

EXCEL

=RATE(60,-93.22,5000)*12 // returns 4.5%

Example

In the example shown, the formula in C10 is:

EXCEL

=RATE(C7,-C6,C5)*C8 // returns 4.5%

RATE

Syntax

Arguments

Return Value

Details

Examples

See Also