# Rate Function

**Visual Studio .NET 2003**

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

Function Rate( _ ByVal NPer As Double, _ ByVal Pmt As Double, _ ByVal PV As Double, _ Optional ByVal FV As Double = 0, _ Optional ByVal Due As DueDate = DueDate.EndOfPeriod, _ Optional ByVal Guess As Double = 0.1 _ ) As Double

#### Parameters

*NPer*- Required.
**Double**specifying 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*- Required.
**Double**specifying payment to be made each period. Payments usually contain principal and interest that doesn't change over the life of the annuity. *PV*- Required.
**Double**specifying 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*- Optional.
**Double**specifying 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's 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*- Optional. Object of type
`Microsoft.VisualBasic.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*- Optional.
**Double**specifying value you estimate will be returned by**Rate**. If omitted,*Guess*is 0.1 (10 percent).

#### Exceptions/Errors

Exception type | Error number | Condition |
---|---|---|

ArgumentException | 5 | NPer <= 0. |

#### Remarks

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** can't find a result after 20 tries, it fails. If your guess is 10 percent and **Rate** fails, try a different value for *Guess*.

#### Example

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`

).

Sub TestRate() Dim PVal, Payment, TotPmts, FVal, Guess, APR As Double Dim PayType As DueDate Dim Fmt As String = "##0.00" ' Define percentage format. Dim Response As MsgBoxResult FVal = 0 ' Usually 0 for a loan. Guess = 0.1 ' Guess of 10 percent. 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

#### Requirements

**Namespace:** **Microsoft.VisualBasic**

**Module:** **Financial**

**Assembly:** Microsoft Visual Basic .NET Runtime (in Microsoft.VisualBasic.dll)

#### See Also

DDB Function | FV Function | IPmt Function | IRR Function | MIRR Function | NPer Function | NPV Function | Pmt Function | PPmt Function | PV Function | SLN Function | SYD Function | ArgumentException Class