Description

The RATE function 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

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

For a complete description of the arguments nper, pmt, pv, fv, and type, refer PV Function.

Arguments

Argument	Description	Required/ Optional
Nper	The total number of payment periods in an annuity.	Required
Pmt	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 pmt is omitted, you must include the fv argument.	Required
Pv	The present value the total amount that a series of future payments is worth now.	Required
Fv	The future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (the future value of a loan, for example, is 0). If fv is omitted, you must include the pmt argument.	Required
Type	The number 0 or 1 and indicates when payments are due. Look at the Type-Payment Table given below.	Optional
Guess	Your guess for what the rate will be. If you omit guess, it is assumed to be 10 percent. If RATE does not converge, try different values for guess. RATE usually converges if guess is between 0 and 1.	Optional

Type-Payment Table

Set type equal to	If payments are due
0 or omitted	At the end of the period
1	At the beginning of the period

Notes

Make sure that you are consistent about the units you use for specifying guess and nper
- If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for guess and 4*12 for nper
- If you make annual payments on the same loan, use 12% for guess and 4 for nper
If the Function fails to converge to a solution, RATE returns #NUM! error.
If any of the specified arguments is non-numeric, RATE returns #VALUE! Error.

Applicability

Excel 2007, Excel 2010, Excel 2013, Excel 2016

Example

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