Number of Periods Annuity Formula PV

Formula

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

Use

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

The number of periods annuity formula PV can be used for example to determine the number of annuity payments required to clear the balance on a loan account.

Excel Function

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

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

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

Example Using Number of Periods Annuity Formula PV

A loan account balance of 50,000 (PV) is being paid off with regular periodic payments of 6,000 (Pmt) at the end of each period. If the interest rate on the loan is 6%, the number of periods (n) it would take to clear the loan balance is given as follows:

n = LN (Pmt / (Pmt - PV x i)) / LN(1 + i)
n = LN (6000 / (6000 - 50000 x 6%)) / LN(1 + 6%)
n = 11.90 periods 

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

n = NPER(i,pmt,PV,FV,type)
n = NPER(6%,-6000,50000,,)
n = 11.90 periods

The number of periods annuity formula PV is one of many annuity formulas used in time value of money calculations, discover another at the link below.

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

You May Also Like


Related pages


accounting equation spreadsheetpoc accountingcompute total manufacturing costdebtor turnover days formulapercent complete calculationthe fundamental accounting equation iscogs formulaaccrual journal entryaccount receivable interview questions and answersequivalent units process costingdiscount on notes payable journal entrydefine debit note and credit noteif the labor efficiency variance is unfavorable thenpercentage of sales method bad debthow to calculate weighted average of percentagesformula for compounded continuouslyamortization schedule creatortimesheet template pdfexcel rate formula examplemargin versus markup calculatorbad debts accounting entrycalculating net present value in excelwhat is the difference between gross margin and markupaccounting for leases journal entriesgaap fixed assetnet realizable value accountinggoods held on consignmentpractice adjusting entriesaccounting debits and credits cheat sheetpresent value of annuity calculationlabour price variancecreditors aging reportexcel npv calculatorall adjusting entries always involvegross profit margin formula excelannuity factor equationexamples of petty cashstraight line amortization examplewhat is common stockholders equityreorder point calculation examplegp percentage formuladeferred income journal entryjournal entry for goodwill impairmentyear end closing entries examplesprocess costing fifo methodallowance for accounts receivableweighted average cost accountingdepreciation charges on fixed assetspv of a growing annuityformula for calculating depreciationcalculating future value of an annuityhow to calculate weighted average of percentageswhat is a contra account in accountingrent due to landlord journal entryroe dupont formuladefine monetary unit assumptionlease amortization schedule excelwhat is double entry bookkeeping exampleare accounts receivable debit or creditexcel bookkeeping templatewithholding tax accounting entriesunearned revenue on income statementinvestment accounting journal entriesfinding payback periodhow to calculate roce ratiodisposal of fixed assets double entryirr perpetuityaccounts payable entries general ledgertime value of money annuity calculatorpurpose of a bank reconciliation statementexamples of marketable securitieswageadvancegoodwill accounting entryperpetuity formula derivationmargin vs markup calculationexcel irr functionoverheads accountingdepreciated assets