Financialadvanced
Calculate the interest rate of a loan with RATE
=RATE(B1*12,-B2,B3)*12
Function reference
RATE in Excel & Google Sheets
RATE is used in 1 formula pattern in this library. Browse worked examples below, or use the generator to build a custom variation for your specific data.
1 advancedBuild a custom RATE formula →
When to use RATE
- Reverse-engineer the interest rate from a quoted monthly payment and loan amount, or compare the implied rate of two financing offers.
Worked examples (1)
Common errors with RATE
RATE returns
RATE uses iterative calculation and may fail to converge. Try adding a guess as the fifth argument — =RATE(nper,pmt,pv,,0.1) — to help it find the solution.
Result is a monthly rate, not annual
RATE returns the rate per period. Multiply by 12 for monthly cash flows to get the annual rate, or use (1+RATE(...))^12-1 for the exact effective annual rate.
Frequently asked questions
How is RATE different from IRR?
RATE is designed for equal periodic payments (annuities). IRR handles irregular cash flows of different amounts. Use RATE for standard loans, IRR for project cash flows.
Need a custom variation?
Describe your specific RATE problem and get a formula written for your exact data.
Open generator with RATE