NUM_PERIODS Function
Evaluates the number of periods for an investment for which periodic and constant payments are made and the interest rate is constant.
Usage
result = NUM_PERIODS (rate, payment, present_value, future_value, when)
Input Parameters
rate—Interest rate on the investment.
payment—Payment made on the investment.
present_value—The current value of a stream of future payments, after discounting the payments using some interest rate.
future_value—The value, at some time in the future, of a current amount and a stream of payments.
when—Time in each period when the payment is made, either 0 for at the end of period or 1 for at the beginning of period.
Returned Value
result—The number of periods for an investment.
Input Keywords
Double—If present and nonzero, double precision is used.
Discussion
Function NUM_PERIODS computes the number of periods for an investment based on periodic, constant payment and a constant interest rate.
It can be found by solving the following:
If rate = 0:
present_value + (payment)(n_periods) + future_value = 0
If rate ≠ 0:
Example
In this example, NUM_PERIODS computes the number of periods needed to pay off a $20,000 loan with a monthly payment of $350 and an annual interest rate of 7.25%. The payment is made at the beginning of each period.
PRINT, NUM_PERIODS(0.0725 / 12, -350., 20000., 0., 1)
; PV-WAVE prints: 70
