Rate (Interest Rate Per Period)

Returns the interest rate per period on a given annuity.

Syntax

Rate <FV, Type, Guess> (Nperiod, Payment, PV)

Where:

• FVis the future value (also called cash balance) expected after the last payment.
• Typeindicates when payments are due.
• Guess is an estimate assumed to be close to the result sought.
• Nperiod is the total number of payment periods.
• Payment is the payment made for each period. Cannot change over the life of the annuity. Typically, includes principal and interest, but no other fees or taxes.
• PV is the present value of the annuity. It is the total amount that a series of future payments is worth today.

Usage Notes

• For this function, consistency in the units used is necessary:
  • Assuming monthly payments on a four-year loan at 12% annual interest, Nperiod should be 4 × 12.
  • Assuming annual payments on a four-year loan at 12% annual interest, Nperiodshould be 4.