Financial Functions
Advanced
RATE Function
Calculate the interest rate per period of an annuity using the RATE function.
Task:
You are evaluating a loan and want to know the interest rate. Calculate the interest rate per period in cell B7 using the RATE function, given the number of periods, payment, and present value.
Learning Objectives:
- Learn the RATE function
- Understand interest rate calculations
- Practice loan analysis
Hints
Solve without hints for +5 XP
The data in this exercise
This is the grid you start with. Cell references in the task — B6, C2 — point at the row numbers and column letters below.
| A | B | |
|---|---|---|
| 1 | Parameter | Value |
| 2 | Nper | 360 |
| 3 | Pmt | -1073.64 |
| 4 | Pv | 200000 |
| 5 | Fv | 0 |
| 6 | Type | 0 |
| 7 | RATE |
What this exercise teaches (contains the answer)
The RATE function is essential for financial analysis, allowing you to determine the interest rate of a loan or investment, which is crucial for comparing different options.