RATE function
This article describes the formula syntax and usage of the RATEfunction in Microsoft Excel.
Description
Returns the interest rate per period of an annuity. RATE is calculated by iteration and can have zero or more solutions. If the successive results of RATE do not converge to within 0.0000001 after 20 iterations, RATE returns the #NUM! error value.
Syntax
RATE(nper, pmt, pv, [fv], [type], [guess])
Note For a complete description of the arguments nper, pmt, pv, fv, and type, see PV.
The RATE function syntax has the following arguments:

Nper Required. The total number of payment periods in an annuity.

Pmt Required. The payment made each period and cannot change over the life of the annuity. Typically, pmt includes principal and interest but no other fees or taxes. If pmt is omitted, you must include the fv argument.

Pv Required. The present value — the total amount that a series of future payments is worth now.

Fv Optional. The future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (the future value of a loan, for example, is 0).

Type Optional. The number 0 or 1 and indicates when payments are due.
Set type equal to 
If payments are due 
0 or omitted 
At the end of the period 
1 
At the beginning of the period 

Guess Optional. Your guess for what the rate will be.

If you omit guess, it is assumed to be 10 percent.

If RATE does not converge, try different values for guess. RATE usually converges if guess is between 0 and 1.

Remarks
Make sure that you are consistent about the units you use for specifying guess and nper. If you make monthly payments on a fouryear loan at 12 percent annual interest, use 12%/12 for guess and 4*12 for nper. If you make annual payments on the same loan, use 12% for guess and 4 for nper.
Example
The example may be easier to understand if you copy it to a blank worksheet.
How do I copy an example?

Select the example in this article.
Important Do not select the row or column headers.
Selecting an example from Help

Press CTRL+C.

In Excel, create a blank workbook or worksheet.

In the worksheet, select cell A1, and press CTRL+V.
Important For the example to work properly, you must paste it into cell A1 of the worksheet.

To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.
After you copy the example to a blank worksheet, you can adapt it to suit your needs.


Note The number of years of the loan is multiplied by 12 to get the number of months.