Documentation/Calc Functions/RRI

    From The Document Foundation Wiki
    This page contains changes which are not marked for translation.
    Other languages:

    Function name:

    RRI

    Category:

    Financial Analysis

    Summary:

    Calculates the periodic interest rate that would be equivalent to the change in value of a loan or investment over a specified number of periods.

    RRI returns an interest rate for the same time unit as that used to specify the number of periods. For example, if the period length is one month, the function returns the equivalent monthly interest rate. If the period length is one year, then the function returns the equivalent annual interest rate and can therefore be used to calculate the compound annual growth rate (CAGR).

    Syntax:

    RRI(Periods; PV; FV)

    Returns:

    Returns a real number, which is the equivalent periodic interest rate for a loan or investment with the supplied characteristics. The number returned is a percentage and, by default, is formatted as a percentage.

    Arguments:

    Periods is a positive real number, or a reference to a cell containing that number, which is the number of payment periods in the term. Periods need not be an integer value, in which case the fractional period will calculate as if partially compounded.

    PV is a real number, or a reference to a cell containing that number, which is the present value of the investment or loan.

    FV is a real number, or a reference to a cell containing that number, which is the future value of the loan or investment at the end of its term. FV must be in the same currency unit as PV.

    • If any of Periods, PV, or FV is non-numeric, then RRI reports a #VALUE! error.
    • If Periods is not greater than 0.0, then RRI reports an invalid argument error (Err:502).
    • If PV is equal to 0.0, then RRI reports an invalid argument error (Err:502).
    • If PV and FV have different signs, and Periods is not equal to 1.0, then RRI reports a #NUM! error.

    Additional details:

    • The formula for RRI is:
    [math]\displaystyle{ \text{RRI}~=~\left( \frac{FV}{PV} \right)^{\frac{1}{Periods}}~-~1 }[/math]
    • RRI calculates the fixed interest rate needed, so that PV currency units invested for Periods (and compounded each period) is worth PV at the end of the term.

    Examples:

    Formula Description Returns
    =RRI(A1; A2; A3) where cells A1:A3 contain the values 8, 1000, and 1500 respectively. Here an investment increases in value from 1000 to 1500 currency units over eight yearly periods. The function returns 5.20%, meaning that if the 1000 currency units was instead invested in a fixed rate interest account, with annually compounding interest, the account would need to pay 5.20% to achieve the same growth. 5.20%
    =RRI(4; 7500; 10000) Here an investment increases in value from 7,500 to 10,000 currency units over four semiannual periods. The function returns 7.46%, meaning that if the 7,500 currency units was instead invested in a fixed rate interest account, with semiannually compounding interest, the account would need to pay 7.46% to achieve the same growth. 7.46%
    =RRI(8; 1000; 950) Here an investment decreases in value from 1000 to 950 currency units over eight monthly periods. The function returns -0.64%, with the negative value representing the equivalent rate of loss per month. -0.64%

    Related LibreOffice functions:

    FV

    NPER

    PMT

    PV

    RATE

    ODF standard:

    Section 6.12.44, part 2

    Related (or similar) Excel functions:

    RRI since v.2013.