Rate Function

Description

The function Rate returns a value specifying the interest rate per period for an annuity.

Syntax

Rate (NPer, Pmt, PV)

Rate (NPer, Pmt, PV, FV)

Rate (NPer, Pmt, PV, FV, Due)

Rate (NPer, Pmt, PV, FV, Due, Guess)

Required Parameters

NPer

The total number of payment periods in the annuity. For example, if you make monthly payments on a four-year car loan, your loan has a total of 4 * 12 (or 48) payment periods.

Pmt

The payment to be made each period. Payments usually contain principal and interest that doesn't change over the life of the annuity.

PV

he present value, or value today, of a series of future payments or receipts. For example, when you borrow money to buy a car, the loan amount is the present value to the lender of the monthly car payments you will make.

Optional Parameters

FV

The future value or cash balance you want after you make the final payment. For example, the future value of a loan is $0 because that is its value after the final payment. However, if you want to save $50,000 over 18 years for your child's education, then $50,000 is the future value. If omitted, 0 is assumed.

Due

Value that specifies when payments are due. This argument must be either 0 if payments are due at the end of the payment period, or 1 if payments are due at the beginning of the period.

If omitted, 0 is assumed.

Guess

The value you estimate is returned by Rate. If omitted, Guess is 0.1 (10 percent).