{"id":97,"date":"2018-12-27T16:30:55","date_gmt":"2018-12-27T16:30:55","guid":{"rendered":"https:\/\/www.howtoexcel.info\/Excel\/?p=97"},"modified":"2021-09-29T06:04:29","modified_gmt":"2021-09-29T06:04:29","slug":"finding-interest-rate-excel","status":"publish","type":"post","link":"https:\/\/www.howtoexcel.info\/Excel\/finding-interest-rate-excel\/","title":{"rendered":"How to calculate interest rate in Excel for a one time deposit?"},"content":{"rendered":"\r\n<p><em><span style=\"color: #000000; font-size: 14px;\"><span lang=\"en-gb\">Note: <\/span>Please <a style=\"color: #000000;\" href=\"https:\/\/support.office.com\/en-us\/article\/RATE-function-9f665657-4a7e-4bb7-a030-83fc59e748ce\"> click here<\/a> if you are looking<span lang=\"en-gb\"> out<\/span> to find the interest rate of an Annuity (a sum which is paid every year)<span lang=\"en-gb\"> using the Rate function in Excel.<\/span><\/span><\/em><\/p>\r\n<p style=\"text-align: justify;\" align=\"justify\"><span style=\"color: #000000;\"><span lang=\"en-gb\">This article is about finding interest rate in a simple way for a one time deposit. <\/span>Consider that at present, I am getting yearly 10% interest rate on my deposits. My friend <span lang=\"en-gb\">has been <\/span>suggest<span lang=\"en-gb\">ing<\/span> a plan wherein if I deposit $50,000, I would get $250,000 at the end of 18 years. How do I find out the interest rate<span lang=\"en-gb\"> (compound interest)<\/span> in this case so that I can make the right decision?<\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">It is so simple in excel with the Power function<span lang=\"en-gb\"> and it can be done in just one line of calculation<\/span>. You just need to find out the 18th root of 5<span lang=\"en-gb\"> as follows<\/span>.<\/span><\/p>\r\n<p align=\"left\"><span style=\"color: #000000;\">250,000<span lang=\"en-gb\">\/<\/span>50,000<span lang=\"en-gb\">=5<\/span><\/span><\/p>\r\n<p align=\"left\"><span style=\"color: #000000;\">(1+R) =POWER(<span lang=\"en-gb\">5<\/span>,1\/18)<\/span><\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.howtoexcel.info\/Images\/power\/power_of_number-01.jpg\" alt=\"\" \/><\/figure>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.howtoexcel.info\/Images\/power\/power_of_number-02.jpg\" alt=\"\" \/><\/figure>\r\n\r\n\r\n\r\n<p><span style=\"color: #000000;\">(1+R) =1.094<\/span><\/p>\r\n<p><span style=\"color: #000000;\">Hence R=0.094 or 9.4%<\/span><\/p>\r\n<p><span style=\"color: #000000;\">Since I am already getting 10% interest on my deposit, I will not choose the alternate investment suggested by my friend that yields only 9.4%.<\/span><\/p>\r\n<p><span style=\"color: #000000; font-size: 12px;\"><strong>Search engine keywords for this question<\/strong><\/span><\/p>\r\n<p><span style=\"color: #000000; font-size: 10px;\">Interest rate Excel 2007, 2010, 2013, 2016, reverse interest rate, calculate compound interest rate, how to find the power of a number, reverse calculate interest rate, a number whose nth root gives interest, nth root of a number using power function.<\/span><\/p>\r\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/posts\/97"}],"collection":[{"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/comments?post=97"}],"version-history":[{"count":9,"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/posts\/97\/revisions"}],"predecessor-version":[{"id":270,"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/posts\/97\/revisions\/270"}],"wp:attachment":[{"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/media?parent=97"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/categories?post=97"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.howtoexcel.info\/Excel\/wp-json\/wp\/v2\/tags?post=97"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}