Below is an excerpt from Excel Time Value of Money Functions for CPAs, a CPE course offered by CPASelfstudy.com
New Single Sum functions in Excel 2013
There are two new time value of money functions in Excel
2013, the RRI and PDURATION functions.
Both of these functions will only work if you have Excel 2013 or greater. You will not be able to
replicate the examples using a lower version of Excel.
The RRI function returns the equivalent
interest rate for the growth of an investment.
The inputs required are the number of periods, the present value and the
future value.
In this blog entry, we are only going to discuss RRI and save PDURATION for another time.
RRI Example:
RRI Example:
As an example, let’s say you invested $100,000 for 8 years compounded annually and the investment grows to a value of $150,000. What is the equivalent rate of return? Click here to read the rest of the entry.