NPER function

FUNCTIONS
Depreciation
Payment Streams, Annuities, Loans
Securities
Coupons
Miscellaneous

NPER

Returns the number of payment periods for an annuity.

Syntax:

NPER(rate; payment; presentvalue; futurevalue; type)

rate: the (fixed) interest rate per period.
payment: the payment made each period.
presentvalue: the lump sum payment at the start of the term.
futurevalue: the cash balance paid at the end of the term (optional - defaults to 0).
type: when payments are made (optional - defaults to 0):
0 - at the end of each period.
1 - at the start of each period (including a payment at the start of the term).

NPER returns the number of payment periods implied by a lump sum (presentvalue) at the start of the term, a payment being made each period for numperiods periods, at fixed rate interest, compounded each period, and a lump sum (futurevalue) at the end of the term.
See Derivation of Financial Formulas for the underlying formula.

Example:

NPER(5%; -100; 0; 1000; 0)

returns approximately 8.31, the number of periods to realise this scenario.

Issues:

• The number of periods returned can be fractional. The fraction results from solving the equation, and is not in itself meaningful. Real life periods will be whole.
• Take care that you understand how this function compounds the interest each period. Many financial calculators allow you to set a separate compounding period - spreadsheets do not. Choose the interest rate appropriately.