Rate

Syntax

Rate(PeriodCount, PeriodPayment, CurrentCost, FutureValue, Type[, Guess])

Parameters

PeriodCount. The total number of payment periods in an investment.

PeriodPayment. Regular payment (once a period) that remains the same during the entire annuity term. Payments usually include primary payments and interest payments, but do not include taxes and charges.

CurrentCost. The present value, or the lump-sum amount that a series of future payments is worth now.

FutureValue. The required value of future cost or the remainder after the last payment.

Type. Selecting payment time. This parameter may take the following values:

Guess. Optional parameter. Expected interest rate. The default value is 0.01.

NOTE. To determine the parameter, specify either the parameter value or the cell address where it is located.

Description

It returns the interest rate per period of a loan or an investment.

Comments

If the Rate function does not agree, try to use various values for the Guess parameter. Rate usually agrees if the Guess value is between the 0 and 1 numbers.

The Rate function is calculated using the iteration method and can generate a zero value or a number of values. If successive function results do not match the accuracy of 0.0000001 after 20 iterations have been completed, Rate will return an error.

Example

Formula Result Description
=Rate(12, -100, 1000, 0, 1, 0.01) 0,04

Annuity interest rate over one period based on the following terms:

  • The total number of periods is 12.

  • The regular payment is 100.

  • The current value is 1000.

  • The future value is 0.

  • The payment is effected at the beginning of the period.

  • The estimate rate value is 0.01.
=Rate(12, A0, B0, 0, 0, 0.03) 0,03

Annuity interest rate over one period based on the following terms:

  • The total number of periods is 12.

  • The regular payment is specified in the A0 cell, value 154.1.

  • The current value is specified in the B0 cell, value is 1500.

  • The future value is 0.

  • The payment is effected at the end of the period.

  • The estimate rate value is 0.03.

See also:

Function Wizard │ Financial Functions