Microsoft Office Tutorials and References

In Depth Information

**Figuring Loan Calculations**

You can use two optional arguments with NPER:

✓
Future Value:
The amount you want the loan to be worth at the end of

its life. The default is 0.

✓
Type:
This tells the function whether payments are applied at the end

of the period or the beginning of the period. A value of 0 indicates the

end of the period. A value of 1 indicates the beginning of the period. The

default is 0.

These optional arguments, when used, become the respective fifth and sixth

arguments.

Calculating the number of payments

using PDURATION

This function is a twist on how to determine the number of payments. Instead

of using a periodic payment amount in the calculation, PDURATION uses the

present value of the loan (the borrowed amount) and the future value of the

loan (what you will have paid in total when the loan is paid off). This

calculation is useful if and when you know just three pieces of information:

✓
The Loan Principal

✓
Annual Interest Rate

✓
The Amount Paid back (the combined Principal and Interest)

The result PDURATION gives you is the number of periods based on the

previously listed factors.

Here’s how to use the PDURATION function:

1. Enter the following into separate cells on your worksheet:

•Loanprincipal

•Annualinterestrate

•Theexpectedtotalamountyouwillhavepaidbackattheendof

the loan

2. Position the cursor in the cell where you want the results to display.

3. Enter
=PDURATION(
to begin the function entry.

4. Click the cell where you entered the interest rate, or just enter the cell

address.