RATE Function
The RATE function is one of the financial functions. It is used to calculate the interest rate for an investment based on a constant payment schedule.
Syntax
RATE(nper, pmt, pv, [fv], [type], [guess])
The RATE function has the following arguments:
| Argument |
Description |
| nper |
The number of payments. |
| pmt |
The payment amount. |
| pv |
A present value of the payments. |
| fv |
A future value (i.e. a cash balance remaining after the last payment is made). It is an optional argument. If it is omitted, the function will assume fv to be 0. |
| type |
A period when the payments are due. It is an optional argument. If it is set to 0 or omitted, the function will assume the payments to be due at the end of the period. If type is set to 1, the payments are due at the beginning of the period. |
| guess |
An estimate at what the rate will be. It is an optional argument. If it is omitted, the function will assume guess to be 10%. |
Notes
Cash paid out (such as deposits to savings) is represented by negative numbers; cash received (such as dividend checks) is represented by positive numbers. Units for guess and nper must be consistent: use N%/12 for guess and N*12 for nper in case of monthly payments, N%/4 for guess and N*4 for nper in case of quarterly payments, N% for guess and N for nper in case of annual payments.
How to apply the RATE function.
Examples
The figure below displays the result returned by the RATE function.
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