How to Calculate APR in excel

[Louis]

Any one out there know how to calulate APR (annual
percentage rate) in excell 2003? Please response, thanks.
bceducation(removethis)@hotmail.com

[Chip Pearson]

Louis,

See the RATE worksheet function.

--
Cordially,
Chip Pearson
Microsoft MVP - Excel
Pearson Software Consulting, LLC
www.cpearson.com

"Louis" <anon...@discussions.microsoft.com> wrote in message
news:717d01c4023b$b2a94420$a001...@phx.gbl...

[Norman Harker]

Hi Louis!

Use the RATE function but watch out because it returns the effective
rate for the period counted by the nper argument:

=RATE(20*12,-1000,120000,0,0)
Returns: 0.662503162469502%

This is the effective rate per month because we looked at 20 years of
monthly payments.

To get the APR(12), just multiply by 12:

=RATE(20*12,-1000,120000,0,0)*12
Returns: 7.95003794963402%

Where the frequency of the cash flow is different from the frequency
of the APR that you want, then you need a more complex formula:

=RATE(20*26,-500,120000,0,0)
Returns: 0.348364748725388%
Which is the fortnightly effective rate.

No problem if you want the APR26; you just multiply by 26. But if you
want the APR12 you need to use:

=((1+RATE(20*26,-500,120000,0,0))^(26/12)-1)*12
Returns: 9.07589298954754%

--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
njha...@optusnet.com.au
Excel and Word Function Lists (Classifications, Syntax and Arguments)
available free to good homes.

"Louis" <anon...@discussions.microsoft.com> wrote in message
news:717d01c4023b$b2a94420$a001...@phx.gbl...