Microsoft Office Tutorials and References
In Depth Information
Using NPER to Estimate How Long a Nest Egg Will Last
Figure 13.4. Use
Use PPV to calculate how much you can borrow to meet a monthly
to calculate how much you can borrow to meet a monthly
NPER to Estimate How Long a Nest Egg Will Last
to Estimate How Long a Nest Egg Will Last
NPER stands for number of periods. If you have a 401K retirement account
and are trying to calculate how long you can withdraw fixed monthly pay-
ments from the account, use NPER.
NPER(rate, pmt, pv, fv, type)
The NPER function returns the number of periods for an investment, based on
periodic, constant payments and a constant interest rate. This function takes
the following arguments:
rate — This is the interest rate per period.
pmt — This is the payment made each period; it cannot change over the
life of the annuity. Typically, pmtcontains principal and interest
but no other fees or taxes.
• ppv — This is the present value, or the lump-sum amount that a series
of future payments is worth right now.
• ffv — This is the future value, or a cash balance you want to attain
after the last payment is made. If fvis omitted, it is assumed to be 0,
which means the future value of a loan is zero. If you want to leave
an inheritance to your kids, you use that amount as fv.