Caculating A.P.R.

  • Thread starter Thread starter John B.
  • Start date Start date
Use the RATE function as follows:

=RATE(360,-1500,250000,,1)

Period = 360 months (12 months x 30 years)
Payment/period = -1500 (always a negative as this represents negative cash
flow
Amount of loan =250000
FV = omitted (the reason for the consecutive commas)
Type = 1 (indicating payment is due at the beginning of the period

You can also use cell references for any of the above arguments.

HTH
 
Hi Michael!

=RATE(360,-1500,250000,,1)*12

You need to multiply by 12 to get the APR12 (aka Annual Nominal
compounded monthly)

RATE returns the effective rate for the frequency counted by Nper.

Also. Most mortgages provide for the first payment to be made 1 month
after draw down with some adding complications to the first payment so
that the payments fall due on a particular date. We tend to assume
type is 0 for mortgage questions.
--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
(e-mail address removed)
Excel and Word Function Lists (Classifications, Syntax and Arguments)
available free to good homes.
 
Back
Top