Calculating implied interest rate

[SunKing951]

Hi there, I'd like to calculate an implied interest rate whereby I have the starting principal amount, and then a long string of cash flows over a period of 117 months. What makes this a bit more difficult in terms of using the "RATE" formula or something similar, is that the monthly cash flows (payments) are not fixed; every 12 months they change so there are various levels. The "RATE" formula I researched seems designed only for a fixed monthly payment which stays uniform over the entire period.

Any ideas?

Many thanks

 

[tc88]

Hi there, I'd like to calculate an implied interest rate whereby I have the starting principal amount, and then a long string of cash flows over a period of 117 months. What makes this a bit more difficult in terms of using the "RATE" formula or something similar, is that the monthly cash flows (payments) are not fixed; every 12 months they change so there are various levels. The "RATE" formula I researched seems designed only for a fixed monthly payment which stays uniform over the entire period.

Any ideas?

Many thanks

Is the starting amount a negative dollar amount? Then you could use the IRR formula (where A1 is your negative principal amount and A2:A119 are your 117 values)

=IRR(A1:A119)

 

[SunKing951]

Is the starting amount a negative dollar amount? Then you could use the IRR formula (where A1 is your negative principal amount and A2:A119 are your 117 values)

=IRR(A1:A119)

Thank you, that worked well.