All versions
Financial
The Excel RATE function finds the interest rate per period of a loan or investment — reverse-engineering the APR from the payment, term, and amount. It solves iteratively.
Quick answer:
=RATE(5*12, -380, 20000)*12 // about 5.1% APR
Syntax
=RATE(nper, pmt, pv, [fv], [type], [guess])
| Argument | Description | |
|---|---|---|
nper | Required | Number of periods. |
pmt | Required | Payment each period. |
pv | Required | Present value (loan amount). |
fv | Optional | Future value (default 0). |
type | Optional | 0 end (default), 1 start. |
guess | Optional | Starting estimate for the iteration (default 10%). |
How to use it
A $20,000 loan paid off at $380/month for 5 years implies what monthly rate?
=RATE(5*12, -380, 20000)*12 // about 5.1% APR (multiply by 12)
Try it: interactive demo
Live demo
Change the inputs and watch the result update.
Result:
Practice workbook
Download the free RATE practice workbook
Every example on this page, ready to open in Excel — plus practice challenges with answers on a separate tab. No sign-up required.
Frequently asked questions
Why multiply RATE by 12?
RATE returns the rate per period. For a monthly loan, multiply by 12 to get the annual rate (APR).
Why does RATE return #NUM!?
It couldn’t converge. Provide a guess argument or check your signs — pv and pmt must have opposite signs.
Do pv and pmt need opposite signs?
Yes — one is money in, the other money out, or RATE can’t solve.
Is RATE exact?
It’s an iterative approximation, accurate to about 0.0000001 within 20 iterations.
Master functions like this in one day
This page covers one function. Our Excel Formulas and Functions class covers the 30 that matter most — live, hands-on, taught by professionals in Dallas–Fort Worth, Houston, Austin, Oklahoma City, Denver, or online.
See the Formulas & Functions Class