I have an amortization of 60 months, monthly payment amount and original loan amount. I am trying to find the excel formula that will help me compute the rate.
i tried =rate(nper, pmt, pv)…but i get an error. what am i doing wrong?
2 Comment(s)
You almost have it, for a non annunity or a convential loan, your pv should be a negative number. So just make sure you put a – in front of your pv value and you’re good to go.
Your formula is pretty much correct, although for a loan your present value (PV) must be negative to avoid the error. So for a $100,000 loan with $700 payment the formula should read =RATE(360,700,-100000). Keep in mind too that the result is a monthly rate.
You almost have it, for a non annunity or a convential loan, your pv should be a negative number. So just make sure you put a – in front of your pv value and you’re good to go.
Shaka_DaMan | Dec 1, 2009 | Reply
Your formula is pretty much correct, although for a loan your present value (PV) must be negative to avoid the error. So for a $100,000 loan with $700 payment the formula should read =RATE(360,700,-100000). Keep in mind too that the result is a monthly rate.
Keith | Dec 3, 2009 | Reply