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Effective interest rate + fees formula

  1. #1
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    Effective interest rate + fees formula

    Hi,

    Is there a possibility to create a formula that can calculate the effective interest rate plus additional fees? The additional fees are in fixed amounts and are not in a percentage.

    Best regards

  2. #2
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    Re: Effective interest rate + fees formula

    Hi

    Have a look maybe the RATE Function will work for you. I have included the help notes from Excel.
    The RATE function syntax has the following arguments:

    ## Nper Required. The total number of payment periods in an annuity.


    ## Pmt Required. The payment made each period and cannot change over the life of the annuity. Typically, pmt includes principal and interest but no other fees or taxes. If pmt is omitted, you must include the fv argument.


    ## Pv Required. The present value — the total amount that a series of future payments is worth now.


    ## Fv Optional. The future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (the future value of a loan, for example, is 0). If fv is omitted, you must include the pmt argument.


    ## Type Optional. The number 0 or 1 and indicates when payments are due.



    Set type equal to

    If payments are due



    0 or omitted

    At the end of the period


    1

    At the beginning of the period


    ## Guess Optional. Your guess for what the rate will be.

    ##If you omit guess, it is assumed to be 10 percent.


    ##If RATE does not converge, try different values for guess. RATE usually converges if guess is between 0 and 1.




    Remarks

    Make sure that you are consistent about the units you use for specifying guess and nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for guess and 4*12 for nper. If you make annual payments on the same loan, use 12% for guess and 4 for nper.
    Does this help?
    Cheers

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