Rate Function

Rate function is used calculating interest rate per period for a loan.

Syntax for RATE Function is


PV – Present Value

rate – Interest Rate

Nper – Payment Periods

Pmt – Payment

FV – Future Value

Type1 if payment is at the beginning of the period, 0 if payment is at the end of the period


Jane wants to take a loan for a total of 50,000$. Her optimal plan for paying it back is 2,250$ monthly payments for 24 months. In order for Jane’s plan to work, what should be the interest rate of the loan?

Our formulation using rate function for this example is :


In order for Jane’s plan to work, monthly interest rate must be 0.63%.

You may also like...

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.