Estimate rate of interest for a loan
RATE( nLoan, nPayment, nPeriods ) --> nRate
<nLoan> amount of money you get from the bank <nPayment> amount of money you pay back per period <nPeriods> number of periods you pay the loan back
<nInterest> estimated rate of interest per period, 1 == 100%
RATE() calculates the rate of interest per period for the given loan, payment per periods and number of periods. This is done with the same equation used in the PAYMENT() or PERIODS() function:
<nPayment> = <nLoan>*(<nInterest>/100)/(1-(1+<nInterest>/100)ˆ(-<nPeriods>))
However, this equation can not be solved for <nInterest> in a “closed” manner, i.e. <nInterest> = …, so that the result can only be estimated.
// You get a loan of 5172.56, pay 100 back every month for // 5 years (60 months). The effective interest rate per // period (=month) is ? rate( 5172.56, 100, 60 ) // --> 0.005
rate( 5172.56, 100, 60.0 ) == 0.005 rate( 6000.0, 100, 60.0 ) == 0.0
RATE() is compatible with CT3’s RATE().
Source is finan.c, library is libct.
PV(), FV(), PAYMENT(), PERIODS()