You can use the PDURATION function in Excel to calculate how long it will take you to reach an investment goal.
- [Instructor] Managing personal and corporate finances…takes careful planning.…If you want to know how long it will take you to reach…a particular target value, starting with an investment…that will grow at a known rate, you can use the…P duration function to calculate how many periods…it will take you to reach your goal.…In this movie, I will show you how to perform…that type of calculation.…My sample file is the Reach Goal workbook,…and you can find it in the chapter one folder…of your exercise files collection.…The P duration function takes three arguments.…
The first is the interest rate, expressed as an annual rate.…So we have 4%.…If our interest is compounded monthly, then we would want…to divide that by 12, the number of months in the year.…If it is compounded quarterly, we would divide by four.…Semi-annually, divide by two, and so on.…Next you need to know the amount of money you're starting…with, in this case that is $60,000.…And we would want to know how long it will take…to grow $60,000 to $100,000, the future value,…
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- Calculating the effect of interest rates and inflation
- Finding the arithmetic and geometric means of growth rates
- Calculating the future and present value of an investment
- Calculating loan payments for a fully amortized loan
- Calculating the effect of paying extra principal with each payment
- Finding the number of periods required to meet an investment goal
- Calculating net present value and internal rate of return
- Building a cash tracking worksheet
- Visualizing cash flows using a waterfall chart