Interest rate per period

Returns the interest rate per period on a given annuity.

Syntax

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

Where:

FV is the future value (also called cash balance) expected after the last payment.

Type indicates 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, Nperiod should be 4.