How to Use Excel RATE Function in Office 365? (With Examples)
Tags: excelfunctions, excelratefunctionino, ratefunctioninexcel, ratefunctioninoffice
Published: 2020-10-03 12:06:52

---
title: How to Use Excel RATE Function in Office 365? (With Examples)
published: true
date: 2020-10-03 07:07:01 UTC
tags: ExcelFunctions,ExcelRATEFunctioninO,RATEFunctioninExcel,RATEFunctioninOffice
canonical_url: https://geekexcel.com/how-to-use-excel-rate-function-in-office-365-with-examples/
---

## Excel RATE Function:

![RATE Function](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/RATE-Function.png)<figcaption id="caption-attachment-15049">RATE Function</figcaption>

We will illustrate the definition, fundamental syntax, and usage of the **Excel RATE Function in Office 365**. Get an official version of **Microsoft Excel** from the following link: [https://www.microsoft.com/en-in/microsoft-365/excel](https://www.microsoft.com/en-in/microsoft-365/excel).
## RATE Function – Definition:

- The Excel RATE function **returns the interest rate evaluated by iteration**. It computes the interest rate per period of an annuity and can have zero or more solutions.

## Fundamental Syntax of RATE Function:

The fundamental syntax of **RATE Function** is,

```
=RATE(nper, pmt, pv, [fv], [type], [guess])
```

### Argument Description:

- **Nper (Required)** – It is the total number of payment periods (months, quarters, years, etc.) in an annuity.
- **Pmt (Required)** – It is the payment made every period.
- **Pv (Required)** – The present value of all future payments.
- **Fv (Optional)** – The future value after last payment. It is also referred to as the desired cash balance and its default value is 0.
- **Type (Optional)** – It needs to be indicated when payments are due. It can be a number either 0 or 1.  

| **Set type equal to** | **If payments are due** |
| 0 or omitted | At the end of the period |
| 1 | At the beginning of the period |

- **Guess (Optional)** – It is the number between 0 and 1. When this argument is omitted, it assumes to be 10%.

### Important Note:

- [**#NUM! Error**](https://geekexcel.com/how-to-fix-num-error-in-excel-office-365-with-example/) – It appears if the function fails to converge to a solution. This occurs if you failed to use the cash flow convention of negative numbers to indicate outgoing cash flows and positive numbers to represent incoming cash flows.
- [**#VALUE! Error**](https://geekexcel.com/how-to-fix-value-error-in-excel-office-365-with-example/) – The function returns the #VALUE! Error if any one of the supplied values is a non-numeric character.

## Examples of RATE Function:

Let’s look at some practical examples of **RATE Function**  and explore how to use it in Microsoft Excel.

### **Example 1: **

- Here, in this example, we have selected the input cells C5, D5 & E5 to calculate the interest rate.
- Refer to the below syntax of the  **RATE function**  to return the output.

```
=RATE(C5\*12,D5,E5)
```

![Example 1](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/Example-1-4.png)<figcaption id="caption-attachment-15046">Example 1</figcaption>

- You need to click **Enter** to execute the formula.

![Example 1 - Output](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/Example-1-Output-4.png)<figcaption id="caption-attachment-15045">Example 1 – Output</figcaption>

- Now, you can see the result in the G5 cell.
- Then, you can repeat the same for other input values.
- In another way, you can just drag the cell G5 to G7 so it automatically returns the respective output.

### **Example 2: **

- The [**#NUM! Error**](https://geekexcel.com/how-to-fix-num-error-in-excel-office-365-with-example/) appears if the function fails to converge to a solution. This occurs if you failed to use the cash flow convention of negative numbers to indicate outgoing cash flows and positive numbers to represent incoming cash flows.

![Example 2](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/e2.png)<figcaption id="caption-attachment-15050">Example 2</figcaption>

### **Example 3: **

- The function returns the [**#VALUE! Error**](https://geekexcel.com/how-to-fix-value-error-in-excel-office-365-with-example/) if any one of the supplied values is a non-numeric character.

![Example 3](https://eadn-wc04-371788.nxedge.io/cdn/wp-content/uploads/2020/10/e3.png)<figcaption id="caption-attachment-15051">Example 3</figcaption>

## A Brief Summary:

We hope that the above post helped you to know how to use **EXCEL RATE Function in Office 365**. The examples let you understand the function even more clearer. Don’t forget to share your **queries/doubts** in the below comment section. Thanks for visiting **[Geek Excel!!](https://geekexcel.com/)** Keep Learning With Us!!

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