PERIOD (duration of fixed-interest investments)

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PERIOD (duration of fixed-interest investments)

Syntax:

PERIOD(Rate, PV, FV)

Description:

Returns the duration (i.e., the number of periods) required to obtain a specific future value in a fixed-interest investment.

This function is applicable to investments with just one payment (made at the beginning) and a fixed interest rate.

The function expects the following arguments:

Rate is the interest rate (per payment period).

PV is the present value.

FV is the future value.

Compatibility notes:

This function is not supported by Microsoft Excel. If you save a document in Excel format, all calculations using this function will be replaced by their last result as a fixed value.

Tip: You can perform calculations with the PERIOD function using Excel-compatible functions as follows:

PERIOD(Rate, PV, FV) is equivalent to NPER(Rate, 0, PV, -FV)

Note the minus sign in front of FV!

Example:

You would like to obtain a payout of €5000 with a fixed-interest investment of €3000. The yearly interest rate is 6%. How many periods (= years) are required for this?

PERIOD(6%, 3000, 5000) returns 8.76669 periods (i.e., years)

See also:

RRI