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 ¹ 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