Microsoft Office Tutorials and References

In Depth Information

**Using NPER to Estimate How Long a Nest Egg Will Last**

Figure 13.4.

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

payment budget.

payment budget.

Using

Using
NPER

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.

Syntax

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

rate
—
This is the interest rate per period.

•
pmt

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.