The Excel RRI Function

RRI Equation

The Excel RRI function uses the following calculation to calculate the interest rate that is equivalent to an investment with present value pv   having future value   fv after Nper   periods:

RRI Equation

Basic Description

The Excel RRI function calculates the equivalent interest rate for an investment with specified present value, future value and duration.

Note: the RRI function was introduced in Excel 2013 and so is not available in earlier versions of Excel.

The syntax of the function is:

RRI( nper, pv, fv )

Where the arguments are as follows:

nper-The number of periods over which the investment is made.
pv-The present value of the investment.
fv-The future value of the investment.

RRI Function Example

The following spreadsheet shows the Excel RRI function used to calculate the interest rate required for an investment of $10,000, to reach a value of $15,000 over 10 periods.

1Interest rate for an investment
of $10,000 to reach a value of
$15,000 over 10 periods:
2=RRI( 10, 10000, 15000 )
1Interest rate for an investment
of $10,000 to reach a value of
$15,000 over 10 periods:

The above formula returns the value 0.041379744, or 4.14%.

I.e. an interest rate of 4.14% per period would be required for an investment of $10,000 to reach a value of $15,000 over 10 periods.

Formatting the Result as a Percentage

Note that, in the above spreadsheet, cell A2 has been formatted to show percentages. If your result is showing a decimal value (e.g. 0.041379744), you can format the cell as a percentage in one of the following ways:

Method 1 - Percentage Formatting Through the Ribbon Options

The easiest way to change cell formatting is to select the cell(s) to be formatted and then select the percentage button from the 'Number' group on the Home tab of the Excel ribbon (see below):

Excel Format Cells As Percentage Button on Ribbon

Method 2 - Percentage Formatting In Excel 2003

If you have an older version of Excel, that does not have the ribbon, you can change the formatting of an Excel cell via the following steps:

Excel Format Cells Dialog Box Percentage Option
  • Select the cell(s) to be formatted.
  • Right click on the selected cell, and from the right-click menu, select the Format Cells ... option.
  • The 'Format Cells' dialog box (shown on the rightabove) will be displayed. Ensure the Number tab of the dialog box is selected and from within the options in this tab, select Percentage.
  • An option will appear in the Format Cells box, that allows you to select how many decimal places you want to display.
  • Click OK.

Further examples of the Excel RRI function are provided on the Microsoft Office website.

RRI Function Errors

If you get an error from the RRI function, this is likely to be one of the following:

Common Errors

Occurs if either:

  • The nper or the pv argument is zero;
  • Any of the supplied arguments are negative.
#VALUE!-Occurs if any of the supplied arguments are non-numeric.