3. Calculating Interest Rate
Use the formula
to calculate the interest rate, given the other available data. This formula follows the format
You may need to format the cell to see the non-rounded value (right-click the cell, select “Format Cells” and increase the number of decimal places in the resulting window). Copy and paste this result as a value, as you previously did, to use it in other calculates without risking a circular reference.
To find the APR, multiply this result by 12 or enter
but use a different cell, so you don’t affect subsequent calculations. Note that the APR is different than the annual percentage yield (APY), which factors in the effects of monthly compounding. To calculate the APY, enter the formula
to see the decimalized version. Click the “%” sign in the Home tab’s Number group to convert it to a percentage. Again, you might need to increase the number of decimal places to see the exact figure.