optiRum (version 0.33)

RATE: Calculates compounded interest rate

Description

Based on loan term, instalment, and the loan amount, this function calculates the associated compound interest rate. This function is designed to be equivalent to the Excel function RATE. It calculates a fixed interest rate.

Usage

RATE(nper, pmt, pv)

Arguments

nper

Number of periods

pmt

Instalment per period (should be negative)

pv

Present value i.e. loan advance (should be positive)

Value

• rate The corresponding compound interest rate required to arrive at an FV of 0

See Also

PMT PV

Other finance: APR; PMT; PV

Examples

RATE(12,-500,3000) # 0.126947 Taken from excel

df<-data.frame(nper=c(12,12),pmt=c(-500,-400),pv=c(3000,3000))
RATE(df$nper,df$pmt,df$pv)  # c(0.126947,0.080927) Taken from excel