Managing personal and corporate finances takes careful planning. Many individuals and businesses try to save a certain amount of money, whether as part of an individual retirement account or a building fund. Once you determine how much you can set aside each month, you can use Excel’s NPER function to see how long it will take you to reach your goal.
- [Voiceover] In the previous movie…I showed you how to calculate the duration required…for an investment to reach a target value…if you don't add any new money to the investment.…In this movie I will show you…how to calculate the number of periods…required to reach a target value,…assuming constant payments of the same amount.…My sample file is NumberOfPeriods_01_09,…and you can find it in the…chapter one folder of the exercise files collection.…I need five arguments for this particular formula.…The annual interest rate,…which I will divide by 12, assuming monthly compounding.…
Then the payment each period,…in other words how much am I putting in each month?…Next is the present value,…which is the amount of initial investment at time zero.…And note that payment and the present value…are both negative numbers.…That's because they represent…a cash outflow from my account.…Future value is the payment that I want to receive,…and it's a positive value at the end of the investment,…and finally payment due indicates…
- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 24s
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