# Annuity solve for interest rate

=RATE(nper,pmt,pv,fv)

To solve for an annuity interest rate, you can use the RATE function. In the example shown, C9 contains this formula:

=RATE(C7,-C6,C4,C5)

An annuity is a series of equal cash flows, spaced equally in time. The goal in this example is to have $100,000 at the end of 10 years, with an annual payment of $7,500 made at the end of each year. What interest rate is required?

To solve for the interest rate, the RATE function is configured like this in cell C9:

=RATE(C7,-C6,C4,C5)

**nper** - from cell C7, 10.

**pmt** - from cell -C6, -7500

**pv** - from cell C4, 0.

**fv** - from cell C5, 100000

With this information, the RATE function returns 0.0624. When a percentage number format is applied, the result displays as 6.24%. Note payment is negative because it represents a cash outflow.

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