Talk:Documentation/Calc Functions/RATE

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    SF Comments

    (1) Summary. Suggest replacing with – “Calculates the fixed interest rate per period for an investment, such that the present value followed by a payment each period will result in a required future value at the end of term.”.
    (2) Returns. Insert “decimal” before “fraction”. Change “parametric constraints” to “arguments”. Mention that by default the result is formatted as a percentage.
    (3) Arguments, NPer. Suggest changing “periods, during which payments are made (payment period)” to “payment periods”.
    (4) Arguments, Pmt. Suggest changing “constant annuity paid in each period” to “the constant payment made each period. If a value is given for the FV argument, this may be left blank (in which case it defaults to 0)”. Please provide an example of this latter circumstance (assuming you can find one that converges!).
    (5) Arguments, PV. Suggest replacing “the present cash value in a sequence of payments” with “the present value of the investment (the lump sum payment at the start of the term)”.
    (6) Arguments, FV. Suggest changing “value (future value)” to “future value”.
    (7) Arguments, general. Would it be worth stating that Pmt, PV and FV should all be in the same currency unit?
    (8) Arguments, Type. Please make sure that this description is the same as other occurrences of this argument for functions that I have already reviewed.
    (9) Arguments, Guess. Suggest replacing “determines the estimated value of the interest with iterative calculation” with “suggests an estimated value of the interest rate to be used to initialize the iterative algorithm”.
    (10) Arguments, 1st bullet. This is obviously not true as far as FV is concerned, as demonstrated by the first example in the Examples section. It isn’t true for Pmt either – try the formula “=RATE(3,10,-900,1,0,0.5)”. Also, there is no such condition in the code. I assume all the examples you tried did not converge and gave a 523 error. Suggest delete bullet point.
    (11) Arguments, 2nd bullet. This statement does not appear to be true – try the following formula “=RATE(0.9,-90,90,1,0,0.5)”. Stick with the NPer > 0 condition stated in the ODF, which matches the code.
    (12) Arguments, Warning. I see no need for this to be a warning on the wiki – I would prefer it to be a bullet – consistent with many other pages that highlight error conditions.
    (13) Additional details. Would the following paragraph from the Open Office website be a useful addition to this page – “RATE calculates the fixed interest rate needed, so that PV (the value today) followed by a payment each period for NPer periods results in FV, the value at the end of the term. Interest is assumed to be compounded each period. The calculation uses iteration to solve an equation, with Guess as the starting value for the iteration. If this function returns error Err:523, the iteration has failed to converge - try a different guess or recheck the parameters.”?
    (14) Examples, 1st example. Delete “a payment period of”. Insert “the” before “future value”. Insert “a” before “starting” and change “as 0.5” to “of 0.5”. Change “(due at the end)” to “Type = 0 and so payments are due at the end of each payment period”.
    (14) Examples, 2nd example. Delete “a payment period of”. Insert “the” before “future value”. Insert “a” before “starting” and change “as 0.1” to “of 0.1”. Change due at the end by default” to “Type = 0 by default and so payments are due at the end of each payment period”.
    (15) Examples, 3rd example. Replace “since Pmt is positive real number and” with “and will”.

    --Stevefanning (talk) 2020-11-25T16:18:50 (UTC)

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