How do I find unknown interest rate using TVM functions

[Guest]

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?

 

[Guest]

See the RATE function.
Post back with any questions.

Does that help?
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Regards,
Ron

XL2002, WinXP

 

[Guest]

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?

 

[Guest]

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

 

[Peo Sjoblom]

Try

=RATE(12,,-10,18)

--

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

 

[Guest]

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.

 

[Peo Sjoblom]

Mine calculates the annual rate, I got 5.2%

I have a few financial functions here

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

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

 

[Fred Smith]

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?

 

[Dana DeLouis]

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%