RATE

Advanced

Financial

Calculates interest rate per period for a loan or investment. Essential for comparing financial products and determining actual costs.

Syntax
=RATE(nper, pmt, pv, [fv], [type], [guess])
Parameters
nper
Required
(number)

Total number of payment periods

pmt
Required
(number)

Payment per period

pv
Required
(number)

Present value

fv(number)

Future value (optional, default 0)

Examples
Real-world examples to help you understand how to use RATE

Loan interest rate

=RATE(360, -1000, 150000)

Calculates monthly rate for $150K loan with $1,000 monthly payment over 30 years

Result: 0.42% (monthly)

Investment return rate

=RATE(10, -1000, 0, 15000)

Annual return rate needed to grow $1,000 yearly payments to $15,000 in 10 years

Result: ~6.14%

Common Use Cases
  • ✓Compare loan offers
  • ✓Calculate actual APR
  • ✓Evaluate investment returns
  • ✓Analyze lease vs buy rates
  • ✓Determine break-even rates
Pro Tips
  • 💡Returns rate per period (monthly if monthly payments)
  • 💡Multiply monthly rate by 12 for annual rate
  • 💡May require guess parameter if not converging
  • 💡Can be slow to calculate
Common Errors
  • ⚠️Forgetting to annualize monthly rate
  • ⚠️Wrong signs for pv and pmt
  • ⚠️#NUM! error when no solution exists
Related Formulas
PMTPVFVNPER

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