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To calculate the annual interest rate for a $5000 loan with payments of $93.

You can use the PMT function to figure out payments for a loan, given the loan amount, number of periods, and interest rate.

If RATE does not converge, RATE will return a #NUM! error. Try different values for guess between 0 and 1. The Excel PMT function is a financial function that returns the periodic payment for a loan. Guess (optional) - guess is a seed value to use for iteration. Use 0 for payments due at the end of the period (regular annuities) and 1 for payments due at the end of the period (annuities due). Type (optional) - type is a boolean that controls when when payments are due. When fv is omitted, it defaults to zero (0) and pmt must be provided. This is the cash balance required after all payments have been made.įv (optional) - The future value, or a cash balance required after the last payment is made. In Excel 2007, click the Microsoft Office button, and then click Excel Options. Note: If pmt is not provided, the optional fv argument must be supplied. To add Solver to your Excel, perform the following steps: In Excel 2010, Excel 2013, Excel 2016, and Excel 2019, click File > Options. In annuity functions, cash paid out is represented by a negative number. This number cannot change over the life of the annuity. Pmt (required) - The payment made each period. You can enter nper as 5*12 to show how the number was determined. For example, a 5-year car loan with monthly payments has 60 periods. Nper (required) - The total number of payment periods in the annuity. In Column B, we will use a formula to check if the cells in Column C are empty or not. We are given the data below: In the worksheet above, we listed AGM-related tasks in Column A. The RATE function takes six separate arguments, three of which are required as explained below. Suppose we wish to test a cell and ensure that an action is taken if the cell is not blank. If the results of RATE do not converge within 20 iterations, RATE returns the #NUM! error value. The RATE function calculates by iteration. You can use RATE to calculate the periodic interest rate, then multiply as required to derive the annual interest rate.

The RATE function returns the interest rate per period of an annuity.