RATE Function
The Excel RATE function is used to return the interest rate per period of a loan or investment.
The syntax for the RATE function is:
=RATE(nper, pmt, pv, [fv], [type], [guess])
Argument |
Purpose |
|---|---|
nper |
The number of payments for the loan or investment |
pmt |
The payment made each period |
pv |
The present value, or total amount a number of future payments is worth now |
fv |
The future value, or total remaining after the last payment has been made. This argument is optional, and if omitted the total is assumed to be 0 |
type |
When the payments are due. It can be entered as 1 or 0 and is optional. If omitted the value is assumed to be 0
|
guess |
Your guess at what the rate may be. It is optional and if omitted, the guess is assumed to be 10% |
The examples below show the RATE function being used to return the interest rate dependent upon different parameters.
Function |
Result |
|---|---|
=RATE(B4*12,-C4,A4) |
3.49% Interest rate returned on a £5,000 loan paid in £200 monthly payments for 5 years. Payments are made at the end of each period |
=RATE(B4*12,-C4,A4,,1) |
3.67% Interest rate returned on a £5,000 loan paid in £200 monthly payments for 5 years. Payments are made at the beginning of each period |
=RATE(B4*52,-C4,A4) |
4.00% Interest rate returned on a £5,000 loan paid in £200 weekly payments for 5 years. Payments are made at the end of each period |
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