Returns the number of compounding periods (usually years) required for an investment at a present value to reach a future value earning a fixed interest rate.
Syntax:
CTERM(interest:number, fv:number, pv:number)
interest | is the interest rate per period, expressed as a decimal fraction, |
fv | is the desired future value of the investment, |
pv | is the present value of the investment. |
The formula underlying CTERM
is:
periods = ln(fv ÷ pv) ÷ ln(1 + interest)
Example:
CTERM(0.10, 2000, 1000)
returns the number 7.27
(years), the time taken for £1000 to grow into £2000 at an interest rate of 10% per annum.