determine unknown interest rates

  • Thread starter Thread starter Consuela
  • Start date Start date
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Consuela

I have a question regarding how to get Excel to return
unknown interest rates. If I know the value of a deposit
and the value of that same deposit in X number of
months/years, how do I figure out the compound interest
rate?

I'd also like to calculate the annual rate, and the
effective rate.

Thanks for any help!
 
Check out help for RATE.

=RATE(5,0,-1000,1257.33,0)

returns 5%
5 is the number of year (periods) of compounding
0 additional money added over the term
-1000 present value
1257.33 future value
0 payments at the end of period
 
To calculate effective rates, you can use the NOMINAL and EFFECT functions
which are in the Analysis Toolpak.
 
What is the Analysis toolpak? I don't seem to have it.
I'm using Excel 2000 if that makes a difference...

Thanks,
Consuela
 
It comes with excel/office, if you don't have it installed look under
tools>add-ins,
check it, keep the cd handy and follow the instructions
 
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