# Documentation/Calc Functions/RATE

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RATE

## Category:

Financial Analysis

## Summary:

Calculates the constant interest rate per period of an annuity.

## Syntax:

RATE(NPer; Pmt; PV[; [FV][; [Type] [; Guess] ] ])

## Returns:

Returns a real number (expressed as a percentage or fraction) which is the interest rate per period of an investment for the given parametric constraints.

## Arguments:

NPer is a real number or a reference to the cell containing that number which is the total number of periods, during which payments are made (payment period).

Pmt is a real number or a reference to the cell containing that number which is the constant annuity paid in each period.

PV is a real number or a reference to the cell containing that number which is the present cash value in a sequence of payments.

FV is a real number or a reference to the cell containing that number which is the desired value (future value) at the end of the periods. If it is omitted, then the function uses 0.

Type is the due date of the payment at the beginning or end of each period. If it is omitted, then the function uses 0.

Type Maturity Date
0 due at the end
1 due at the beginning

Guess is a real number or a reference to the cell containing that number which determines the estimated value of the interest with iterative calculation. If omitted, 0.1 (10%) is assumed.

• If either of Pmt or FV is a positive real number the function will not converge and return an error value.
• If NPer is less than 1, the function will not converge and return an error value. Warning: Because of the iterative method used, it is possible for IRR to fail and return Error 523, with "Error: Calculation does not converge" in the status bar. In that case, try another value for Guess.

## Additional details:

• RATE solves the following equation:

## Examples:

Formula Description Returns
=RATE(3,-10,900,1,0,0.5) The function calculates the constant interest rate for a payment period of 3 periods if 10 currency units are paid regularly and the present cash value is 900 currency units with future value as 1 and starting guess as 0.5. (due at the end) -76.34%
=RATE(3,-10,900) The function calculates the constant interest rate for a payment period of 3 periods if 10 currency units are paid regularly and the present cash value is 900 currency units with future value as 0 and starting guess as 0.1 by default. (due at the end by default) -75.63%
=RATE(3,10,900,1,0,0.5) The function will not converge since Pmt is positive real number and return a non-convergence error. Err:523

RATE