How do I find unknown interest rate using TVM functions

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24DBTH - 18 Jun 2006 01:03 GMT

I invest ?$ and need to have ?$ in ? years. How do I find out what interest
I need to earn on my initial investment to have my future amount?

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Ron Coderre - 18 Jun 2006 01:12 GMT

See the RATE function.
Post back with any questions.

Does that help?
***********
Regards,
Ron

XL2002, WinXP

> I invest ?$ and need to have ?$ in ? years. How do I find out what interest
> I need to earn on my initial investment to have my future amount?

Reply to this Message

24DBTH - 18 Jun 2006 01:29 GMT

I tried that but that doesn't seem correct.

I invest $10 today and in 12 years I need it to be worth $18 how do I come
up with what the rate needs to make that $8?
=RATE(Nper 1?, Pmt -10?, Pv 10?, Fv 18, Type 1) Does it automatically
calculate the rate?

> See the RATE function.
> Post back with any questions.
[quoted text clipped - 8 lines]
> > I invest ?$ and need to have ?$ in ? years. How do I find out what interest
> > I need to earn on my initial investment to have my future amount?

Reply to this Message

Peo Sjoblom - 18 Jun 2006 01:45 GMT

Try

=RATE(12,,-10,18)

Signature

Regards,

Peo Sjoblom

Excel 95 - Excel 2007
Northwest Excel Solutions
www.nwexcelsolutions.com
"It is a good thing to follow the first law of holes;
if you are in one stop digging." Lord Healey

>I tried that but that doesn't seem correct.
>
[quoted text clipped - 16 lines]
>> > interest
>> > I need to earn on my initial investment to have my future amount?

Reply to this Message

24DBTH - 18 Jun 2006 02:04 GMT

Thank you, I tried your formula, and came up with an answer that was close to
what I had through my idea, =RATE( 1,-10,,18,1)/15. Now I don't know which
is correct as both look correct but there is quite a discrepency. I almost
think yours is more correct, but am unsure.

> Try
>
[quoted text clipped - 20 lines]
> >> > interest
> >> > I need to earn on my initial investment to have my future amount?

Reply to this Message

Peo Sjoblom - 18 Jun 2006 02:22 GMT

Mine calculates the annual rate, I got 5.2%

I have a few financial functions here

http://www.nwexcelsolutions.com/financial_function_page.htm

Signature

Regards,

Peo Sjoblom

Excel 95 - Excel 2007
Northwest Excel Solutions
www.nwexcelsolutions.com
"It is a good thing to follow the first law of holes;
if you are in one stop digging." Lord Healey

> Thank you, I tried your formula, and came up with an answer that was close
> to
[quoted text clipped - 30 lines]
>> >> > interest
>> >> > I need to earn on my initial investment to have my future amount?

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Fred Smith - 18 Jun 2006 16:44 GMT

You have a very simple problem, and you are making it unnecessarily complicated.

Nper must be 12, because you have 12 years for your money to grow.
I don't know why you would divide the result by 15. Where did 15 come from? It
makes no sense, and should not be there.

Peo's solution is correct. Why are you finding it so difficult to accept his
help?

Signature

Regards,
Fred

> Thank you, I tried your formula, and came up with an answer that was close to
> what I had through my idea, =RATE( 1,-10,,18,1)/15. Now I don't know which
[quoted text clipped - 25 lines]
>> >> > interest
>> >> > I need to earn on my initial investment to have my future amount?

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Dana DeLouis - 18 Jun 2006 17:13 GMT

Hi. These two equations give the same results.

=RATE(12,,-10,18)
=POWER(18/10,1/12)-1

Both give Peo's solution of 5.0202%

Signature

HTH. :>)
Dana DeLouis
Windows XP, Office 2003

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24DBTH - 18 Jun 2006 01:39 GMT

do I put in 1 year in the Nper spot and at the end /12 to get the % rate?

> I invest ?$ and need to have ?$ in ? years. How do I find out what interest
> I need to earn on my initial investment to have my future amount?

Reply to this Message