Excel 2000 in a Nutshell

Name

RATE

Synopsis

Use RATE to determine the interest rate of an annuity for a specific period. RATE uses an iteration method to determine the interest rate for the annuity. If a value is not specified for the Guess argument, it starts with a value of 0.1 and performs 20 attempts to determine the correct interest rate.

To Calculate

=RATE(Nper, Pmt, PV, FV, Type, Guess)

You must specify a value for either the Pmt or FV arguments, but you do not have to specify both. The FV, Type and Guess arguments are optional, but the Nper and PV arguments must have values.

Pmt

Indicates payment that is made for each period. For example, if you are making monthly payments of $355, that is the value of the Pmt argument. The Pmt argument normally includes only principal and interest. If you do not specify a value for the Pmt argument you must specify a value for the FV argument.

PV

Indicates the present value of the annuity. The present value indicates the value of the annuity including the amounts of the future payments.

FV

Indicates the future value of the annuity. If you do not specify a value for the FV argument it is assumed to have a value of 0.

Guess

This is an optional argument that can be used to indicate your guess as to the interest rate for the annuity. You need to base your guess on the type of units specified for the Nper argument. For example, if you are making monthly payments on the annuity, the Guess argument needs to indicate the amount of interest charged each month. For example, ...