Say someone got a loan for $30,000. They promised to pay back $1,000 a month for 3 years. At the end of the 3 years they would have paid back $36,000. How do you calculate the interest rate on the loan?
How do you calculate interest rate on a loan?
In EXCEL:
=RATE(36,-1000,30000)
produces 1.0207% (per month).
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