Estimating the annual interest rate with an ordinary
annuity.
Fill in the missing annual interest rates in the following table for an ordinary annuity stream.
Number of Payments or Years 
Annual Interest Rate 
Future Value 
Annuity 
Present Value 

1010 
? 
$0.000.00 

$500.00500.00 
$2 comma 307.382,307.38 

1616 
? 
$10 comma 302.6410,302.64 
$401.31401.31 
$0.000.00 

4040 
? 
$0.000.00 
$2 comma 074.172,074.17 
$40 comma 000.0040,000.00 

9090 
? 
$1 comma 036 comma 494.751,036,494.75 
$650.00650.00 
$0.000.00 
Number of Payments or Years 
Annual Interest Rate 
Future Value 
Annuity 
Present Value 

1010 
nothing% (Round to two decimal places.) 
$0.000.00 

$500.00500.00 
$2 comma 307.382,307.38 
1616 
nothing% (Round to two decimal places.) 
$10 comma 302.6410,302.64 

$401.31401.31 
$0.000.00 
4040 
nothing% (Round to two decimal places.) 
$0.000.00 

$2 comma 074.172,074.17 
$40 comma 000.0040,000.00 
9090 
nothing% (Round to two decimal places.) 
$1 comma 036 comma 494.751,036,494.75 

$650.00650.00 
$0.000.00 
no of years 
Future value 
annuity 
present value 
Formula 
value 

1 
10 
0 
500 
2307.38 
Using rate function in MS excel =rate(nper,pmt,pv,fv,type) nper =10 pmt = 500 pv = 2307.38 ,Fv =0 type = 0 
RATE(10,500,2307.38,0,0) 
17.26% 
2 
16 
10302.64 
401.31 
0 
Using rate function in MS excel =rate(nper,pmt,pv,fv,type) nper =16 pmt = 401.31 pv = 0 ,Fv =10302.64 type = 0 
RATE(16,401.31,0,10302.64,0) 
6.00% 
3 
40 
0 
2074.17 
40000 
Using rate function in MS excel =rate(nper,pmt,pv,fv,type) nper =16 pmt = 401.31 pv = 0 ,Fv =10302.64 type = 0 
RATE(40,2074.17,40000,0,0) 
4.18% 
4 
90 
1036494.75 
650 
0 
Using rate function in MS excel =rate(nper,pmt,pv,fv,type) nper =16 pmt = 401.31 pv = 0 ,Fv =10302.64 type = 0 
RATE(90,650,0,1036494.75,0) 
5.00% 
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