Excel works with a variety of data, including financial information. It’s often useful to calculate the interest rate of a loan, for example. Fortunately, Excel can perform this math for you. Let’s learn **how to use RATE in Microsoft Excel.**

## How to Use RATE in Excel

Imagine that you have a loan, and you need to know the annual interest rate for it. These calculations can be done manually, but with Excel’s **RATE** function, you don’t have to do so.

To use **RATE**, you’ll need three inputs: the **amount of your loan**, the **monthly payment**, and the **number of periods in the loan.**

For example, here, we’ll use **$10,000** as the loan amount, **$185** as the monthly payment, and **72** as the number of periods. Place these numbers in cells **A1, A2,** and **A3, **respectively.

Then, click into any empty cell in your workbook. Begin by typing an **=** sign. This tells Excel that you’re inputting a formula into the cell. Then, insert your **RATE** function. Your formula so far reads:

=RATE(

Excel will first need the number of periods. Click into cell **A3,** then type a comma. Next, click into cell **A2** to add the monthly payment amount. Add a final comma, then type a** – **sign. To find the rate, you’re subtracting the loan amount inside the function.

Click into cell **A1**, then type **)**. Now, your formula is:

=RATE(A3,A2,-A1)

Finally, to find the annual rate, multiply the function by **12**:

=RATE(A3,A2,-A1)*12

Hit **Enter** on your keyboard, and Excel will return the annual interest rate: **9.95%.**

As you can see, Excel’s **RATE** function makes it quick and easy to calculate interest rates. You need only three simple inputs, and your spreadsheets with this function inside will quickly do the calculations for you. It’s the perfect way to save time and maintain perfect accuracy.