Number of Periods Annuity Formula FV

Formula

n = LN ((FV x i + Pmt) / Pmt) / LN(1 + i)
Variables used in the annuity formula
FV = Future Value
Pmt = Periodic payment
i = Discount rate
n = Number of periods
LN = Natural logarithm

Use

This number of periods annuity formula FV calculates the number of periods required for an annuity payment (Pmt) made at the end of each period to produce a future value (FV) when a discount rate (i) is applied.

The number of periods annuity formula FV can be used for example, to determine the number of periods is will take for a savings account balance to reach a given value assuming regular periodic deposits are made into the account at the end of each period.

Excel Function

The Excel NPER function can be used instead of the number of periods annuity formula FV, and has the syntax shown below.

NPER(i,pmt,PV,FV,type)

*In this instance, the PV and type arguments are not used when using the Excel number or periods function.

Example Using Number of Periods Annuity Formula FV

An amount of 5,000 (Pmt) is deposited into a savings account at the end of each period. If the discount rate (i) is 4%, calculate the number of periods (n) it will take from the saving account to reach a balance of 120,000 (FV). The number of periods is given as follows:

n = LN ((FV x i + Pmt) / Pmt) / LN(1 + i)
n = LN ((120000 x 4% + 5000) / 5000) / LN(1 + 4%)
n = 17.16 periods

The same answer can be obtained using the Excel NPER function as follows:

n = NPER(i,pmt,PV,FV,type)
n = NPER(4%,-5000,,120000)
n = 17.16 periods

The number of periods annuity formula FV is one example of an annuity formula used in time value of money calculations, discover another at the link below.

Number of Periods Annuity Formula FV November 6th, 2016Team

You May Also Like


Related pages


profit percentage calculation formulahow to calculate interest rate in excelrecording accounts payablepercentage completion methodwhat is journal voucher in accountingavailable for sale securities examplestated annual interest ratefixed declining balance methodbookkeeping double entrythe collection of accounts receivable is recorded by awhat is manufacturing overhead costsubsidiary ledgers and special journalssample chart of accounts for rental propertyjournal entry for capital leaseaccrued interest receivableexamples of accrued incomecost method journal entriesformula for payback period in excelthe accounts receivable turnover ratio measures thetimesheet templatescalculating future value of an annuitywhat is fixed asset turnover ratioexamples of prepaid expenses in accountingcumulative cash flow formulacompounding continuously equationreceipt book template excelwhat is an annuity duemeaning of accounts receivable and accounts payablemarkup v margin calculatordouble entry for deferred taxformula for debtors collection periodpurchase ledger control account formatannuity tables present valueimprest account definitionjournal entry for payroll taxesretained earning accountingaccrued expenses exampleannuity cash flow formuladepreciation accumulated depreciation journal entryallocating overheadddb depreciation calculatoraccrued expenses definitioncommon size income statement formatexample of chart of accounts in general ledgerwiki double entry bookkeepingfull accounting cycle examplesfob point meaningfob accountinghow to record dividends payableaccrued income definitiongross profit calculation examplecalculate debtor days10 steps in the accounting cycleunearned revenue journal entry examplesyear end adjustments journal entriesamortization straight line methodhow to calculate weighted average contribution margingrni reportbad debts accounting entryan example of a contra account istie ratio calculatortrade discount series formulapayback calculation exampleprove it test tutorialnotes payable current liabilityhow to calculate depreciation rate for reducing balance methodgross margin templateallocating overheadaccrual examplesdefinition of capital employedprepaid rent journal entrypresent value annuitysimple petty cash book in excelcredit card equationcalculate inventory turnover ratio