RRI

Formulas / RRI
Calculate an equivalent interest rate for growth.
=RRI(nper,pv,fv)
  • nper - the number of periods
  • pv - the present value of the investment
  • fv - the future value of the investment

Examples

  • =RRI(5, 1000, 1500)

    In this example, the RRI function is used to calculate the equivalent interest rate for an investment that starts with a present value of $1,000, grows to a future value of $1,500 over 5 periods (e.g., years). The formula returns the equivalent interest rate for each period, which is approximately 0.08447 or 8.447%

  • =RRI(10, 200, 400)

    In this example, the RRI function is used to calculate the equivalent interest rate for an investment that starts with a present value of $200, grows to a future value of $400 over 10 periods (e.g., years). The formula returns the equivalent interest rate for each period, which is approximately 0.07177 or 7.177%.

Summary

The RRI function is a useful tool for calculating the equivalent interest rate for an investment over a given time period, based on the present and future values of the investment.

  • The RRI function calculates the equivalent interest rate for the growth of an investment. It is used to calculate the Compound Annual Growth Rate (CAGR). The three arguments required for the function are: nper (number of periods), pv (present value of the investment), and fv (future value of the investment).

Frequently Asked Questions

What is the RRI Function?
The RRI function stands for the Rate of Return on Investment. It is a measure of the performance of an investment over a period of time. It is used to calculate the equivalent interest rate of an investment and to evaluate the growth rate of an investment.
How is the RRI Function Calculated?
The RRI function is calculated by taking the present value of the investment, subtracting the purchase price, and dividing by the purchase price. The result of this equation is the rate of return on investment.
What is the Purpose of the RRI Function?
The primary purpose of the RRI function is to help investors make informed decisions when allocating capital. By understanding the rate of return on their investments, investors can make better decisions about where to invest their money.
What are the Benefits of Using the RRI Function?
  • It provides investors with an accurate measure of performance.
  • It can help investors make better decisions about capital allocation.
  • It can help investors identify potential investments with higher returns.

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