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Tag: RATE function

RATE function: Description, Usage, Syntax, Examples and Explanation

What is RATE function in Excel? RATE function is one of Financial functions in Microsoft Excel that returns the interest rate per period of an annuity. RATE is calculated by iteration and can have zero or more solutions. If the successive results of RATE do not converge to within 0.0000001 after 20 iterations, RATE returns the #NUM! error value. Syntax…

How to calculate annuity for interest rate in excel

An annuity is a series of equal cash flows, spaced equally in time.  To solve for an annuity interest rate, you can use the RATE function. Case study:  The goal in this example is to have $100,000 at the end of 10 years, with an annual payment of $7,500 made at the end of each year. What interest rate is required?…

Calculate interest rate for loan in Excel

To calculate the periodic interest rate for a loan, given the loan amount, the number of payment periods, and the payment amount, you can use the RATE function. Formula =RATE(periods,payment,-amount)*12 Explanation In the example shown, the formula in C10 is: =RATE(C7,C6,-C5)*12 Loans have four primary components: the amount, the interest rate, the number of periodic payments (the loan term) and…

PMT, RATE, NPER, PV and FV Financial Functions in Excel

Learn all about Excel’s PMT, RATE, NPER, PV and FV To illustrate Excel’s most popular financial functions, we consider a loan with monthly payments, an annual interest rate of 6%, a 20-year duration, a present value of $150,000 (amount borrowed) and a future value of 0 (that’s what you hope to achieve when you pay off a loan). We make monthly payments, so we use 6%/12 =…