RATE

Returns the periodic interest required for an investment at a present value to reach a future value within a given period of time.

Syntax:

RATE(fv:number, pv:number, term:number)

fvFuture value.
pvPresent value. The values must be expressed in equivalent terms, e.g. in the same currency.
termPeriod of the investment.

The following formula is used by the RATE function:

interest = ( (fv ÷ pv) 1/term ) - 1

Example:

RATE(1000000, 50000, 25*12)

calculates the monthly rate of interest required to turn £50,000 into £1,000,000 in 25 years time, and returns the number 0.01, which is the rate per month, which in turn equals 12% per annum.