Excel RATE Function
If you want to follow along with this tutorial, please download the example spreadsheet.
Description
The RATE returns the interest rate per period of an annuity. The Rate function is used to calculate the periodic interest rate, then multiple as required to get the annual interest rate. The Rate function is calculated by iteration and can have zero or more solutions.
Syntax and arguments
Formula syntax
Arguments
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Return Value
The RATE function returns a decimal value.
Errors
#VALUE! error value occurs when any arguments are non-numeric values.
#NUM! error value occurs when pmt >= 0.
#NUM! error value occurs when the result of RATE does not converge to within 0.0000001 after 20 iterations.
Remarks
Make sure the argument guess and nper are in the same unit. For instance, a 10-year loan with an annual interest rate of 12% with monthly payments. Use 12%/12 for guess, 12*10 for nper.
Version
Excel 2003 or later
Usage and Examples
Example1: get rate per payment period
In range B3:C8 that lists the details of a load, to calculate its rate per payment period, please use the formula:
=RATE(C4*12,C3,C5)
Press Enter key to get the result.
Example2: get rate per year
In range B3:C8 that lists the details of a load, to calculate its rate per year, please use the formula:
=RATE(C4*12,C3,C5)*12
Press Enter key to get the result.
Relative Functions:
-
Excel PRICEMAT Function
The PRICEMAT function returns the price per $100 face value of a security that pays interests at maturity.
-
Excel PV Function
The PV function returns the present value of a loan or an investment based on a constant interest rate.
-
Excel ACCRINTM Function
The ACCRINTM function returns the accrued interest for a security that pays interest at maturity.
-
Excel AMORDEGRC Function
The AMORDEGRC function returns the linear depreciation of an asset for each accounting period by applying a depreciation coefficient based on the lifetime of the assets.
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