I use the INTRATE function in Excel to calculate the interest rate for a loan or investment. The function takes four arguments: the number of periods, the present value, the future value, and the type of payment (either periodic or lump sum). The function then calculates the interest rate for the given loan or investment.
The syntax of INTRATE in Excel is as follows:
=INTRATE(number, period, rate)
Where:
number is the number of periods for which you want to find the interest rate
period is the number of periods in the year
rate is the annual interest rate
In Excel, the INTRATE function calculates the interest rate for a given series of cash flows. The syntax for the function is:
=INTRATE(discount_rate, investment, number_of_periods, payment_type, fractional_payment)
Where:
discount_rate is the interest rate that you are trying to calculate
investment is the amount of the investment
number_of_periods is the number of periods over which the investment will be made
payment_type is the type of payment: 0 for periodic, 1 for annuity due, and 2 for ordinary annuity
fractional_payment is the fraction of the payment that is at the beginning of the period
There are a few occasions when you should not use INTRATE in Excel. One is when you are trying to calculate the interest on a loan that has already been paid off. In this case, you would use the PPMT function. Another time you should not use INTRATE is when you are trying to calculate the interest on a bond that has already matured. In this case, you would use the IPMT function.
INTRATE is the interest rate per period. It is used to calculate the future value of an investment. Other similar formulae in Excel include:
FV=PV(1+INTRATE)^N
NPV=FV-PV
IRR=INTRATE
