Computes how many periods it will take regular equal payments at a fixed periodic interest rate to reach a future value.
Syntax:
TERM(payment:number, interest:number, fv:number)
payment | The regular payment made each period |
interest | The interest rate received |
fv | The future value you want to achieve |
The following formula is used by the TERM
function:
term = ln(1 + (fv × interest ÷ payment)) ÷ ln(1 + interest)
Example:
If you invest £500 a year into a pension fund, with an interest rate of 10% per year, how long will it take to accumulate £100,000? The formula
TERM(500, 0.10, 100000)
returns the number 31.94
(years).