Difference between revisions of "Documentation/How Tos/Calc: RRI function"
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: returns approximately <tt>'''6.05%'''</tt>. You invest $1,000, and receive $1,600 after 8 years. If you had instead invested that sum in a fixed rate interest account, with annually compounding interest, the account would have needed to pay 6.05% to gain the same value. | : returns approximately <tt>'''6.05%'''</tt>. You invest $1,000, and receive $1,600 after 8 years. If you had instead invested that sum in a fixed rate interest account, with annually compounding interest, the account would have needed to pay 6.05% to gain the same value. | ||
− | + | {{Documentation/SeeAlso| | |
− | [[Documentation/How_Tos/Calc: RATE function| | + | * [[Documentation/How_Tos/Calc: RATE function|RATE]], |
− | [[Documentation/How_Tos/Calc: IRR function| | + | * [[Documentation/How_Tos/Calc: IRR function|IRR]] |
− | [[Documentation/How_Tos/Calc: Financial functions| | + | * [[Documentation/How_Tos/Calc: Financial functions|Financial functions]] |
− | [[Documentation/How_Tos/Calc: Functions listed alphabetically| | + | * [[Documentation/How_Tos/Calc: Functions listed alphabetically|Functions listed alphabetically]] |
− | [[Documentation/How_Tos/Calc: Functions listed by category| | + | * [[Documentation/How_Tos/Calc: Functions listed by category|Functions listed by category]]}} |
=== Issues: === | === Issues: === | ||
* <tt>'''numperiods'''</tt> may be entered as a fractional number, but in this case the result may be slightly inaccurate, as the fractional period will calculate as if partially compounded. | * <tt>'''numperiods'''</tt> may be entered as a fractional number, but in this case the result may be slightly inaccurate, as the fractional period will calculate as if partially compounded. |
Revision as of 14:16, 25 February 2009
RRI
Returns an equivalent interest rate when an investment increases in value.
Syntax:
RRI(numperiods; presentvalue; futurevalue)
- numperiods: the number of periods in the term.
- presentvalue: the value at the start of the term.
- futurevalue: the value at the end of the term.
- RRI calculates the fixed interest rate needed, so that presentvalue invested for numperiods (and compounded each period) is worth futurevalue at the end of the term. RRI returns a fixed interest rate which applies to each period.
- The underlying equation is:
- presentvalue * (1 + RRI)numperiods = futurevalue.
Example:
RRI(8; 1000; 1600)
- returns approximately 6.05%. You invest $1,000, and receive $1,600 after 8 years. If you had instead invested that sum in a fixed rate interest account, with annually compounding interest, the account would have needed to pay 6.05% to gain the same value.
Template:Documentation/SeeAlso
Issues:
- numperiods may be entered as a fractional number, but in this case the result may be slightly inaccurate, as the fractional period will calculate as if partially compounded.