RATE

Description: Returns per period the interest rate 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 100 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, see the PV function.

Nper is the total number of payment periods in an annuity.
Pmt is 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.
PV is the present value - the total amount that a series of future payments is worth now.
FV is 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).
Type is the number 0 or 1 and indicates when payments are due.

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

Guess is 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.

Remarks:

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.

Example:

Suppose you have a four-year $8,000 loan with monthly payments of $200.

RATE(4 * 12, -200, 8000) = 1% (monthly rate of the loan)
RATE(4 * 12, -200, 8000) * 12 = 0.09241767 or 9.24% (annual rate of the loan)