On Wed, 19 Sep 2007 09:54:04 -0700, Tom Ogilvy
wrote:

Here is one way that seems to work:

Payment: 188.71 + 500 = 688.71

=RATE(16,-688.71,10000,0,0,0.01)

produced: 0.0116550291317306

or 1.17% This is the per period interest. the Annual would be 12 times
that:
13.986%

If I check it as
=PMT(0.0116550291317306,16,10000)

I get a payment of 688.71


RATE
Returns the interest rate per period of an annuity. RATE is calculated by
iteration and can have zero or more solutions. If the successive results of
RATE do not converge to within 0.0000001 after 20 iterations, RATE returns
the #NUM! error value.

Syntax

RATE(nper,pmt,pv,fv,type,guess)

Tom,

One problem is that the data provided is not consistent.

OP wrote that with the new payment of $500 extra, he would only be paying
$336.75 in interest. So that would mean total payments of $10,336.75.

16 Payments of 688.71 is $11,019.36 or $1,019.36 in interest. So either he is
only paying 15 months with a small Balloon; or the information about total
interest provided is incorrect.

If, indeed, he is only paying $336.75 in interest, then he can only have 15
payments of $688.71 plus a balloon of $6.10.

So I would use:

=RATE(15,688.71,-10000,6.1)*12 for the annual interest which is 5%.




--ron