#### Rate

##### Rate(periods, payment, presentMoney, futureMoney, type, guess)

Rate returns a number specifying the interest rate per period for an annuity. The units of the returned value are consistent with the units of periods. For example, if periods is in months, then the rate returned will be a monthly interest rate.

Overloads

- Rate(periods, payment, presentMoney)
- Rate(periods, payment, presentMoney, futureMoney)
- Rate(periods, payment, presentMoney, futureMoney, type)
- Rate(periods, payment, presentMoney, futureMoney, type, guess)

Parameters

- periods - A positive Number that specifies the total number of payment periods in the annuity.
- payment - A Number or Currency that specifies the payment that is to be made for each period.
- presentMoney - A Number or Currency that specifies the present value, or value today, of a series of future payments or receipts.
- futureMoney - An optional Number or Currency that specifies the future value or cash balance you want after you've made the final payment. If omitted, 0 will be used.
- type - An optional Number that specifies when payments are due. Specify 0 if payments are due at the end of the payment period, and 1 if payments are due at the beginning of the period. If omitted, 0 will be used.
- guess - An optional Number value estimated to be returned by Rate. If omitted, guess is 0.1 (10 percent).

Return value

Number value.

Examples

- An electronics store offers to finance a $12500 television for $560 per month, over 2 years, with no money down. Is this a good deal? The first step in determining this is to figure out what interest rate the store is charging.

  `Rate(2 * 12, -560, 12500)` - Returns 0.00588 (rounded to 5 decimals). Notice that periods is 24 months, payment (-560) is negative since monthly payments are being paid, and the present value (12500) is positive since at the start of the loan, $12500 was effectively received (the value of the television). The interest rate returned is a monthly interest rate, since periods is in months.

- This next expression calculates the interest rate, expressed as a yearly interest rate and as a percent.

  `Rate(2 * 12, -560, 12500) * 12 * 100` - Returns 7.06 (rounded to 2 decimals). Thus, the store is charging an effective annual interest rate of 7.06 percent.

Note: There is no direct formula for the Rate function and so Reports calculates the value by iteration. The process depends on the initial guess for the rate. If the program reports an error, try changing the value of the guess argument to be closer to what you expect the interest rate to be.