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Financial.Rate Method

.NET Framework 4

Returns a Double specifying the interest rate per period for an annuity.

Namespace:  Microsoft.VisualBasic
Assembly:  Microsoft.VisualBasic (in Microsoft.VisualBasic.dll)
C#
C++
F#
VB
Copy 
public static double Rate(
	double NPer,
	double Pmt,
	double PV,
	double FV,
	DueDate Due,
	double Guess
)

Parameters

NPer
Type: System.Double
Required. Double specifies the total number of payment periods in the annuity. For example, if you make monthly payments on a four-year car loan, your loan has a total of 4 * 12 (or 48) payment periods.
Pmt
Type: System.Double
Required. Double specifies the payment to be made each period. Payments usually contain principal and interest that doesn't change over the life of the annuity.
PV
Type: System.Double
Required. Double specifies the present value, or value today, of a series of future payments or receipts. For example, when you borrow money to buy a car, the loan amount is the present value to the lender of the monthly car payments you will make.
FV
Type: System.Double
Optional. Double specifies the future value or cash balance you want after you make the final payment. For example, the future value of a loan is $0 because that is its value after the final payment. However, if you want to save $50,000 over 18 years for your child's education, then $50,000 is the future value. If omitted, 0 is assumed.
Due
Type: Microsoft.VisualBasic.DueDate
Optional. Object of type DueDate that specifies when payments are due. This argument must be either DueDate.EndOfPeriod if payments are due at the end of the payment period, or DueDate.BegOfPeriod if payments are due at the beginning of the period. If omitted, DueDate.EndOfPeriod is assumed.
Guess
Type: System.Double
Optional. Double specifying value you estimate is returned by Rate. If omitted, Guess is 0.1 (10 percent).

Return Value

Type: System.Double
Returns a Double specifying the interest rate per period for an annuity.
Exception Condition
ArgumentException

NPer <= 0.

An annuity is a series of fixed cash payments made over a period of time. An annuity can be a loan (such as a home mortgage) or an investment (such as a monthly savings plan).

For all arguments, cash paid out (such as deposits to savings) is represented by negative numbers; cash received (such as dividend checks) is represented by positive numbers.

Rate is calculated by iteration. Starting with the value of Guess, Rate cycles through the calculation until the result is accurate to within 0.00001 percent. If Rate cannot find a result after 20 tries, it fails. If your guess is 10 percent and Rate fails, try a different value for Guess.

This example uses the Rate function to calculate the interest rate of a loan given the total number of payments (TotPmts), the amount of the loan payment (Payment), the present value or principal of the loan (PVal), the future value of the loan (FVal), a number that indicates whether the payment is due at the beginning or end of the payment period (PayType), and an approximation of the expected interest rate (Guess).

VB
Copy 

Sub TestRate()
    Dim PVal, Payment, TotPmts, APR As Double
    Dim PayType As DueDate

    ' Define percentage format.
    Dim Fmt As String = "##0.00"
    Dim Response As MsgBoxResult
    ' Usually 0 for a loan.
    Dim FVal As Double = 0
    ' Guess of 10 percent.
    Dim Guess As Double = 0.1
    PVal = CDbl(InputBox("How much did you borrow?"))
    Payment = CDbl(InputBox("What's your monthly payment?"))
    TotPmts = CDbl(InputBox("How many monthly payments do you have to make?"))
    Response = MsgBox("Do you make payments at the end of the month?", MsgBoxStyle.YesNo)
    If Response = MsgBoxResult.No Then
        PayType = DueDate.BegOfPeriod
    Else
        PayType = DueDate.EndOfPeriod
    End If
    APR = (Rate(TotPmts, -Payment, PVal, FVal, PayType, Guess) * 12) * 100

    MsgBox("Your interest rate is " & Format(CInt(APR), Fmt) & " percent.")
End Sub

.NET Framework

Supported in: 4, 3.5, 3.0, 2.0, 1.1, 1.0

.NET Framework Client Profile

Supported in: 4, 3.5 SP1

Windows 7, Windows Vista SP1 or later, Windows XP SP3, Windows XP SP2 x64 Edition, Windows Server 2008 (Server Core not supported), Windows Server 2008 R2 (Server Core supported with SP1 or later), Windows Server 2003 SP2

The .NET Framework does not support all versions of every platform. For a list of the supported versions, see .NET Framework System Requirements.
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Annotations FAQ
Bug with a true interest rate of 0
If you have a term of 6, payments of $3 (-3) and a loan amount of $18, it should do a simple calculation ahead of time to determine that:

if loan / term = payments, then return 0.

So, the following will fail:
Financial.Rate(6, -3, 18);
Financial.Rate(120, -1, 120);
but interestingly,
Financial.Rate(12, -1, 12);
will not throw an exception, even though the values are 1/10th the call above it. One would think that if 12 works, 120 or 1200 or 12000 would work.

Though it does not throw an exception, it returns: -0.0000000029979567065937661

For Financial.Rate(6, -3, 18) to NOT fail, you have to use something like:
Financial.Rate(6, -3, 18.000000000001);

This, to me, seems odd, that a simple check cannot be performed to determine a true 0% (principal only) interest rate without getting an exception.
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