RATE

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

Syntax:

RATE(future_value:number, present_value:number, term:number)

where:

future_value is the desired future value;
present_value is the present value.
The values must be expressed in equivalent terms, e.g. in the same currency;
term is the period of the investment.

Formula:

RATE = ( (future_value ÷ present_value) 1/term ) − 1

Example:

What would be the monthly rate of interest required to turn £50,000 into £1,000,000 in 25 years time?

The formula

RATE(1000000, 50000, 25*12)

returns the number 0.01, which is the rate per month, which in turn equals 12% per annum.