Rate

This method specifies the interest rate per period for an annuity.

Syntax

financial.Rate (nper, pmt, pv, [ fv] , [type], [guess])

Parameters

financial

Reference to a Financial control.

nper

Required. Variant that specifies the total number of payment periods in the annuity. For example, if you make monthly payments on a four-year car loan, your loan has a total of 4 * 12 (or 48) payment periods.

pmt

Required. Variant that specifies the payment to be made each period. Payments usually contain principal and interest that do not change over the life of the annuity.

pv

Required. Variant that specifies the present value, or value today, of a series of future payments or receipts. For example, when you borrow money to buy a car, the loan amount is the present value to the lender of the monthly car payments you will make.

fv

Optional. Variant that specifies the future value or cash balance you want after you make the final payment. For example, the future value of a loan is $0 because that is its value after the final payment. However, if you want to save $50,000 over 18 years for a child's education, then $50,000 is the future value. If omitted, 0 is assumed.

type

Optional. Variant that specifies a number indicating when payments are due. Use 0 if payments are due at the end of the payment period or 1 if payments are due at the beginning of the period. If omitted, 0 is assumed.

guess

Optional. Variant that specifies the value you estimate will be returned by the Rate method. If omitted, guess is 0.1 (10 percent).

Return Value

Result of the Rate calculation.

Remarks

An annuity is a series of fixed cash payments made over a period of time. An annuity can be a loan, such as a home mortgage, or an investment, such as a monthly savings plan.

For all parameters, cash paid out, such as deposits to savings, is represented by negative numbers; cash received, such as dividend checks, is represented by positive numbers.

Rate is calculated by iteration. Starting with the value of guess, the Rate method cycles through the calculation until the result is accurate to within 0.00001 percent. If Rate cannot find a result after 20 tries, it fails. If your guess parameter is 10 percent and Rate fails, try a different value for guess.