Calculates the periodic interest rate of an annuity.
=RATE(nper, pmt, pv, [fv], [type], [guess])
nper - total number of payment periods in an annuity
pmt - payment made each period
pv - present value
fv - [OPTIONAL] future value
type - [OPTIONAL] number 0 or 1 indicating when payments are due
guess - [OPTIONAL] guess for the final rate
The RATE function can be used to calculate the annual interest rate of a loan given the total number of payments, the payment amount, and the loan amount. For example, to calculate the annual interest rate of a $5000 loan with $93.22 monthly payments over 60 payments, you would enter the above formula into a Sourcetable cell:
This will return a value of 4.5%, which is the annual interest rate.
The RATE function is an important financial function in Sourcetable that allows users to calculate the annuity's interest rate per period.
The RATE function calculates the periodic interest rate for an annuity and can be used to derive the annual interest rate through multiplication. It uses an iterative calculation and throws a #NUM! error if it does not converge in 20 iterations.
The RATE function requires the fv argument if there is no pmt argument and requires consistent values for nper and guess.
Frequently Asked Questions
What is the RATE function?
The RATE function is a financial function in Sourcetable that determines the periodic interest rate of an annuity.
How can I use the RATE function?
The RATE function can be used to analyze borrowing and investing at a given rate, as well as to calculate the annual interest rate via multiplication.
What happens if the RATE function does not converge?
The RATE function throws a #NUM! error if it does not converge in 20 tries.
How can I help the RATE function converge?
The RATE function accepts a guess argument which may be changed to help the RATE function converge.
What happens if a non-numerical argument is passed to the RATE function?
The RATE function throws a #VALUE! error if a non-numerical argument is passed to it.