NumPy Financial functions: rate() function

Last update on August 19 2022 21:51:10 (UTC/GMT +8 hours)

numpy.rate() function

The rate() function is used to compute the rate of interest per period.

Syntax:

numpy.rate(nper, pmt, pv, fv, when='end', guess=0.1, tol=1e-06, maxiter=100)

Version: 1.15.0

Parameter:

Name	Description	Required / Optional
nper	Number of compounding periods array_like	Required
pmt	Payment array_like	Required
pv	Present value array_like	Required
fv	Future value array_like	Required
when	When payments are due ('begin' (1) or 'end' (0)) {{'begin', 1}, {'end', 0}}, {string, int}	Optional
guess	Starting guess for solving the rate of interest, default 0.1 Number	Optional
tol	Required tolerance for the solution, default 1e-6 Number	Optional
maxiter	Maximum iterations in finding the solution int	Optional

Notes:

The rate of interest is computed by iteratively solving the (non-linear) equation:

fv + pv*(1+rate)**nper + pmt*(1+rate*when)/rate * ((1+rate)**nper - 1) = 0

NumPy.rate() method Example-1:

>>> import numpy as np
>>> np.rate(8, 10000, 500, 200)

Output:

-2.0184122884653117

Rate is 2.018 per period.

Python - NumPy Code Editor:

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