Annual interest rate
Excel 2003.
This is fairly basic. Say you borrow X amount of dollars with an obligation to pay back Y amount of dollars (Y X; lump sum) 6 months from the date of the loan. Which Excel function is appropriate to determine the interest rate on an annualized basis? Thanks very much. |
One way:
=(Y/X)^n - 1 where n is the number of periods per year (in this case, 2) In article .com, "jw" wrote: Excel 2003. This is fairly basic. Say you borrow X amount of dollars with an obligation to pay back Y amount of dollars (Y X; lump sum) 6 months from the date of the loan. Which Excel function is appropriate to determine the interest rate on an annualized basis? Thanks very much. |
=(Y/X)^2-1 to get the effective annual interest rate (what you are actually
paying yearly taking into account compounding of interest) =(Y/X-1)*2 to get the APR -- Regards, Dave "jw" wrote: Excel 2003. This is fairly basic. Say you borrow X amount of dollars with an obligation to pay back Y amount of dollars (Y X; lump sum) 6 months from the date of the loan. Which Excel function is appropriate to determine the interest rate on an annualized basis? Thanks very much. |
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