Apple iWork '09 User Manual
Page 145
Chapter 6
Financial Functions
145
Example
Assume you are planning for your daughter’s college education. She has just turned 3 and you
expect she will begin college in 15 years. You think you will need to have $150,000 set aside in a
savings account by the time she reaches college. You can set aside $50,000 today and add $200 to
the account at the end of each month. Over the next 15 years, the savings account is expected to
earn an annual interest rate of 4.5%, and earns interest monthly.
Using the RATE function, you can determine the rate that must be earned on the savings account so
that it will reach $150,000 by the time your daughter begins college. Based on the assumptions given,
the rate returned by the function is approximately 0.377%, which is per month since num-periods was
monthly, or 4.52% annually.
num-periods
payment
present-value
future-value
when-due
estimate
=RATE(B2, C2,
D2, E2, F2, G2)
=15*12
-200
-50000
150000
1
=0.1/12
Related Topics
For related functions and additional information, see:
“Choosing Which Time Value of Money Function to Use” on page 348
“Common Arguments Used in Financial Functions” on page 341
“Listing of Financial Functions” on page 96
“Value Types” on page 36
“The Elements of Formulas” on page 15
“Using the Keyboard and Mouse to Create and Edit Formulas” on page 26
“Pasting from Examples in Help” on page 41