RATE for the growth of a single investment
No payments in between: start value, end value, years.
Task:
A fund turned 8,000 into 10,000 over 5 years with nothing added. In B5 give the yearly growth rate it achieved.
Interactive Spreadsheet
Hints
+5 XPno-hints bonusSolve it on your own to keep the bonus. Each hint gets one step closer to the formula.
Variations of RATE
0/3The same formula in the other shapes it takes at work.
- RATE Function
Calculate the interest rate per period of an annuity using the RATE function.
CoreAdvanced - RATE on monthly payments, as a yearly rate
RATE answers per period; multiply by 12 for the figure on the advert.
Advanced - RATE for the growth of a single investment
No payments in between: start value, end value, years.
Advanced
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 | Years | 5 |
| 2 | Invested | 8000 |
| 3 | Worth now | 10000 |
| 4 | ||
| 5 | Yearly rate |
What this exercise teachesMay contain the answer
A 25% total gain over five years is not 5% a year, because each year's growth compounds. RATE finds the steady yearly rate that produces the same end value — about 4.6% — which is the honest number to compare with a savings account.