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=RATE()
Returns the interest rate per period 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 20 iterations, RATE returns the #NUM! error value.
Applies To:
Excel for Microsoft 365Excel for Microsoft 365 for MacExcel 2024Excel 2024 for MacExcel 2021Excel 2021 for MacExcel 2019Excel 2016
=RATE(nper, pmt, pv, [fv], [type], [guess])
Hover argument names in the table for details.
Output typeNumber
Popularity50 / 100
VolatileNo
Dynamic ArrayNo
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◧ Arguments
| Argument | Type | Required | Description |
|---|---|---|---|
nper |
Number | Required | The total number of payment periods in an annuity. |
pmt |
Number | Required | 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 |
Number | Required | The present value — the total amount that a series of future payments is worth now. |
fv |
Number | Optional | 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). If fv is omitted, you must include the pmt argument. |
type |
Number | Optional | The number 0 or 1 and indicates when payments are due. 0 or omitted = At the end of the period; 1 = At the beginning of the period. |
guess |
Number | Optional | 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. |
▣ Examples
▦ Data
| Cell | Value | Description |
|---|---|---|
A2 |
4 | Years of the loan |
A3 |
-200 | Monthly payment |
A4 |
8000 | Amount of the loan |
A5 |
4 | Years of the loan |
A6 |
-200 | Monthly payment |
A7 |
8000 | Amount of the loan |
Monthly rate of the loan with the terms entered as arguments in A2:A4.
=RATE(A2*12, A3, A4)
Result:
1%
Annual rate of the loan with the same terms.
=RATE(A2*12, A3, A4)*12
Result:
9.24%
§ 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.
✦ Tips
- 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.
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