#¡NUM! Error in RATE Formula

Lucas03411 

I provided the answer in my previous response, namely:  provide a "guess" for RATE, for example 25%.

But on second thought, a periodic rate of over 26% seems excessive.  I wonder if it reflects a misuse of the RATE function, in the first place.  GIGO.

So, it might benefit you to describe the terms of the financial arrangement for which you are calculating the rate.

For example, you wrote RATE(F21;F22;-F20), which is effective RATE(12,2800,-10000).  That might describe a loan of 10000 with 12 payments of 2800.

But that is a total payment of 33600 (12*2800), more than 3 times the original principal.  That seems unlikely.

Instead, I wonder if you intended to write RATE(F21;0;F22;-F20), which is effectively RATE(12,0,2800,-10000).  That might describe an investment of 2800 that returns 10000 after 12 periods.

Then, note that RATE has no problem calculating a period rate of about 11.19%.  And that seems like a reasonable rate of return.

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Aside....  You wrote =+(RATE(F21;F22;-F20))

For my edification, please tell me why you enter =+RATE(...) instead of simply =RATE(...).

IOW, why do you enter the "+" before RATE?

Arguably, there is nothing wrong with that.  And many other people do it.

But that's my point:  I would like to understand why people do that, since it is unnecessary.

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Also, please tell me why you enter (RATE(...)) instead of simply RATE(...).

IOW, why do you enter the parentheses around RATE(...)?

Again, arguably, there is nothing wrong with that.  And many other people do it.

But again, it is unnecessary and never useful.

On the contrary, the unnecessary parentheses make it difficult to read formulas, especially in more complicated contexts that involve legitimately nested parenthetical expressions.

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I am just curious about the origin of these dubious habits.  TIA for sharing.