RATE

Syntax:

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

Description: Computes the interest rate per period of an annuity, using iteration, which can result in zero or more solutions.

Arguments:

Name

Type

Description

nper

number

The total number of payment periods.

pmt

number

The payment made each period and cannot change over the life of the annuity. (Typically, pmt includes principal and interest but no other fees or taxes.) If omitted, fv shall be present.

pv

number

The present value.

fv

number

The future value, or a cash balance to be attained after the last payment is made. If omitted, it is assumed to be 0 (i.e., the future value of a loan, for example, is 0).

type

number

The timing of the payment, truncated to integer, as follows:

Value

Timing

0

Payment at the end of the period

1

Payment at the beginning of the period

guess

number

A guess for what the rate will be. If omitted, it is assumed to be 10 percent.

Return Type and Value: number – The interest rate per period of an annuity.

However, if

  • type is any number other than 0 or 1, #NUM! is returned.

  • The result has not converged after an implementation-defined number of iterations, #NUM! is returned.

example: