RATE

The RATE function returns the interest rate per period of a loan or an investment.

Syntax

RATE (Nper, PMT, PV?, FV?, Type?, Guess?) - > Number

Arguments

Arguments	Datatype	Description
Nper	Number	The total number of periods.
PMT	Number/ Node reference	The payment made each period.
PV?	Number/ Node reference	The total amount that a series of future payments is worth now.
FV?	Number/ Node reference	The future value or a cash balance you want to attain after the last payment is made. This is an optional argument.
Type?	Number	Indicates when the payments are made. Type is zero if payments are made at the end of the period and non-zero if payments are made at the start of the period.
Guess?	Number	Estimate of what the rate will be. This is an optional argument.

Example

Consider a series of $2000 payments made at the end of each month for 1 year. The objective is to calculate the interest rate per month where the present value is $20,000.

Periods	0	1	2	3	4	5	6	7	8	9	10	11	12
Present Value	-20000	-	-	-	-	-	-	-	-	-	-	-	-
Payments made	-	2000	2000	2000	2000	2000	2000	2000	2000	2000	2000	2000	2000

To calculate the Interest Rate, the formula should be:

RATE(12,[Payments made],[Present Value],0)

Result

The interest rate is calculated to be 2.92%