Calculate the number of periods for a loan or investment.
- rate - required, interest rate for a period
- pmt - required, payment made each period
- pv - required, present value of a series of future payments
- fv - [OPTIONAL] future value or cash balance at the end of the last payment
- type - [OPTIONAL] when payments are due
=NPER(0.005, -200, -1000, 5000, 0)
In this example, the NPER function is used to calculate the number of periods required to reach a future value of $5,000 with an initial investment of $1,000, making monthly payments of $200, and an interest rate of 0.5% per period (or 6% annually). The formula returns approximately 17.23 periods, meaning it will take approximately 17 to 18 periods to reach the desired future value.
=NPER(0.04/12, -150, 0, 10000, 1)
In this example, the NPER function is used to calculate the number of periods required to accumulate a future value of $10,000 by making monthly payments of $150 at the end of each period, with an annual interest rate of 4% (or 0.3333% monthly). The "type" argument is set to 1, indicating that payments are made at the beginning of each period. The formula returns approximately 54.71 periods, meaning it will take approximately 55 periods to accumulate the desired amount.
The NPER function is a useful tool for calculating the number of periods an investment will take. It requires periodic payments and a constant interest rate as inputs to return the total number of periods for the investment.
- The NPER function calculates the number of periods for a loan or investment, and requires the pv and pmt arguments, as well as the rate. An optional fv argument can also be included.
- The optional type argument determines when payments are due.
Frequently Asked Questions
What is the NPER function?
The NPER function is a financial function used to calculate the number of periods for an investment. It uses periodic, constant payments and a constant interest rate.
What are the arguments for the NPER function?
The arguments for the NPER function are rate, pmt, pv, fv, and type. Rate and pmt are required, while pv and fv are optional. The type argument indicates when payments are due.
What happens if I leave out the optional arguments?
If you leave out the optional arguments, you will receive the same result. However, the type argument is essential for determining when payments are due. To get the most accurate result, it is best to include all arguments.