RATE( ) function

Returns the interest rate per period.


RATE(periods, payment, amount)



Numeric. The total number of periods.


Numeric. The payment made each period.


Numeric. The amount on which payments are based.




This function calculates the interest rate per period implied by an annuity. It assumes that payments are made at the end of the period.

You can use this function to determine the rate of interest being paid on an annuity. For example, if you have the option of leasing or buying, you can use this function to determine the interest rate implied in the lease.

The result is returned to eight decimal places, that is, 0.12345678 or 12.345678%.


To calculate the rate implied in a four-year, $8000 loan with monthly payments of $200, specify:

RATE(48, 200, 8000)

returns 0.00770147.This is the monthly rate because the period is monthly. The annual rate is 0.0077*12, which equals 9.24% compounded monthly, or an effective annual rate of 9.64%, which can be calculated using the EFFECTIVE( ) function.

Related reference
FVANNUITY( ) function
FVSCHEDULE( ) function
PVANNUITY( ) function
EFFECTIVE( ) function

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