end (0 or omitted): Payment is treated as being received or made at the end of each period.
beginning (1): Payment is treated as being received or made at the beginning of each period.
estimate: An optional number value specifying the initial estimate for the rate of return. estimate is a number value and is entered as a decimal (for example, 0.08) or with a per cent sign (for example, 8%). If omitted, 10% is assumed. If the default value does not result in a solution, initially try a larger positive value. If this does not result in an outcome, try a small negative value. The minimum value allowed is –1.
Example
Suppose you would like to help your daughter buy her first house when she is old enough. She has just turned 3 and you expect she will need her own place in 15 years (num-periods is 15*12). You think you will need to have £150,000 (future-value, which is positive because it will be a cash inflow) set aside in a savings account by the time she turns 18. You can set aside £50,000 today (present-value is –50000 because this is a cash outflow) and add £200 (payment is –200 because this is also a cash outflow) to the account at the beginning of each month. Over the next 15 years, the savings account is expected to earn interest monthly (periodic-rate is 0.045/12).
=RATE(15*12, –200, –50000, 150000, 1, 0.1/12) returns approximately 0.376962210924744%, which is per month because num-periods was monthly, or approximately a 4.52% annual rate. Therefore, if the savings account is expected to earn at least this rate over the entire period, it would grow to at least £150,000 over the 15 years.