# NPER

The NPER function in Excel is used to calculate the number of periods required to pay off a loan or investment based on a constant payment and a constant interest rate. This function is useful for financial analysis and planning, as it allows users to determine how long it will take to pay off a loan or investment, and how much interest will be paid over the life of the loan or investment.

## NPER Syntax

The syntax for the NPER function is as follows:

=NPER(rate, payment, present value, [future value], [type])

• rate: The interest rate per period.
• payment: The payment made each period.
• present value: The present value of the loan or investment.
• future value: (Optional) The future value of the loan or investment. If omitted, the future value is assumed to be 0.
• type: (Optional) The type of payment made each period. If omitted, the type is assumed to be 0 (payments made at the end of each period).

## NPER Examples

Suppose you take out a loan of \$10,000 at an annual interest rate of 5%, to be paid back in monthly installments of \$200. Using the NPER function, you can calculate how many months it will take to pay off the loan:

=NPER(5%/12, -\$200, \$10,000)

The result is 63.85, which means it will take approximately 64 months (or 5 years and 4 months) to pay off the loan.

Another example is if you want to know how much you need to save each month to reach a savings goal of \$50,000 in 10 years, assuming an annual interest rate of 3%. Using the NPER function, you can calculate the monthly savings required:

=NPER(3%/12, -\$50,000, 0)

The result is 120.27, which means you need to save approximately \$417.67 per month for 10 years to reach your savings goal.

## NPER Tips & Tricks

• The NPER function assumes that payments are made at regular intervals (e.g. monthly, quarterly, annually).
• The NPER function returns the number of periods required to pay off a loan or investment, rounded up to the nearest whole period.
• The NPER function can be used in conjunction with other financial functions, such as PV, FV, and PMT, to perform more complex financial calculations.

## Common Mistakes When Using NPER

• Forgetting to convert the interest rate to the appropriate periodic rate (e.g. monthly, quarterly, annually).
• Using the wrong sign for the payment and present value arguments. Payments should be entered as negative values, while present values should be entered as positive values.
• Forgetting to include the future value argument, which can result in an inaccurate calculation.

## Why Isn’t My NPER Working?

• Check that the interest rate, payment, and present value arguments are entered correctly and in the correct order.
• Make sure that the future value argument is included if necessary.
• Check that the type argument is entered correctly (0 for payments made at the end of each period, 1 for payments made at the beginning of each period).
• Ensure that the payment and present value arguments have opposite signs.

## NPER: Related Formulae

• PV (Present Value)
• FV (Future Value)
• PMT (Payment)
• IPMT (Interest Payment)
• PPMT (Principal Payment)

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