Calculate Annuity Interest Rate

[clopay1]

I have $56,000 in a annuity. My my monthly income when I annuitize will be $380.00 per month for 180 months. At that time my account balance will be $0. What is my interest rate. (formula please)

[MarvinP]

Is this what you are looking for?
http://office.microsoft.com/en-us/ex...005209232.aspx

[clopay1]

I'm not sure that's what I'm looking for. I thought it maybe a more simple:
RATE(180,380,56000,0,1,0) doesn't seem to work. My 56,000 does grow to 68,400 even with decreasing amounts each month. Must be 2 to 4% interest. Still need help.

[MarvinP]

Make the 380 a negative and multiply the answer by 12 to get the Annual Rate instead of the monthly.

Answer is 2.7489% annually

[clopay1]

Thanks MarvinP. Can you give me the formula for the 2.7489% you arrived at?

[MarvinP]

I took your formula above:

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and made the 380 a negative

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I then multiplied the answer to this number by 12.

[clopay1]

=RATE(B2,-B3,B4) Note: Put this formula where the 2.611% exist or B1

Annual Interest Rate (Unknown, Formula) 2.611%
Total Years to Receive Payments 15
Total Received Per Year 4560
Starting Amount When Annuitized 56000