In financial planning, business analysis, or investment modeling, it’s often important to answer a key question: Microsoft Excel's RRI function helps answer this by calculating the equivalent compound interest rate required to turn one amount into another over a specified number of periods. Whether you're projecting asset growth or evaluating ROI over time, RRI provides a simple and elegant solution.

The Excel RATE function answers that question by calculating the periodic interest rate for loans, annuities, or investments based on known payment terms. It's especially useful when other values (payment, term, future/present value) are known, but the rate is unknown. This article explains how to use RATE effectively—from simple loans to more advanced financial models.

The MDURATION function in Excel calculates the modified Macaulay duration of a security (such as a bond) that pays periodic interest. In simple words:MDURATION measures the price sensitivity of a bond to changes in interest rates, adjusting for how often the bond pays interest. It’s mainly used by investors, portfolio managers, and financial analysts to assess interest rate risk.

The IPMT function in Excel calculates the interest payment for a given period of a loan or investment, based on constant periodic payments and a constant interest rate. In simple words: It tells you how much of your payment is just interest for a specific month or period.

The INTRATE function in Excel calculates the interest rate for a fully invested security between two dates. It is mainly used for short-term investments, such as Treasury bills, where the security does not pay periodic interest (zero-coupon bonds). In simple words: It finds the simple interest rate earned over a specific period.

The EFFECT function in Excel calculates the effective annual interest rate (EAR) or annual equivalent rate (AER) based on the nominal interest rate and the number of compounding periods per year.