The interest rate is calculated on a period-by-period basis.
RATE = (nper, pmt, pv, [fv], [type], [guess])
nper - The number of payment periods in total.
The RATE function returns the annuity's interest rate per period.
FV evaluates the future value of an investment using a constant interest rate as one of the financial functions. FV can be used to make regular, consistent payments or a single lump sum payment. To calculate the future value of a sequence of payments, use the Excel Formula Coach.
The value of your investment in the future (FV). It is zero if you simply pay off a debt, positive if you save money, and negative if you intend to pay off or refinance a balloon payment at the conclusion of your payment period.
FV evaluates the future value of an investment using a constant interest rate as one of the financial functions. FV can be used to make regular, consistent payments or a single lump sum payment. To calculate the future value of a sequence of payments, use the Excel Formula Coach.
The lower the PV and the greater the FV, the higher the interest rate. For the number of periods, the same relationships apply. If the PV remains constant, the FV will increase as time passes or as interest is accrued every period, and vice versa.
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