Nper Function is used for calculating number of periods for an investment based on periodic, constant payments and constant interest rate.
Syntax for Nper() Function:
rate – Interest Rate
PV – Present Value
Pmt – Payment
FV – Future Value
Type – 1 if payment is at the beginning of the period, 0 if payment is at the end of the period
You need to provide first 3 variables in order FV() Function to work. Last 2 variables are optional.
Tifanny asks Nelson for a loan of 25,000$. She can pay Nelson back 1250$ a month. Considering monthly interest rate is 1.25%, how many months will it take Tiffany to pay the loan back to Nelson.
Our formulation with Nper() Function for this deal is:
Nper(1.25% ; -1.250 ; 25.000 ; 0 ; 0) = 23.15
So with 1,250$ monthly payments, it will take 23.15 months for Tiffany to pay 25,000$ loan back to Nelson with 1.25% monthly interest rate.