Microsoft KB Archive/102227

Mac Works 3.0: How to Adjust the Period of Financial Functions

PSS ID Number: Q102227 Article last modified on 10-22-1998

3.0

MACINTOSH

=
========================================================= 3.00 MACINTOSH kbother

= SUMMARY =

The compounded period used in calculating financial functions can be altered by changing the number of periods over which the function is calculated. For example, a four-year loan compounded monthly will have 48 periods (four years times 12 months). The rate should be entered as the rate for each period.

To calculate a 9-percent annual interest rate, compounded monthly, enter the monthly interest rate, which in this example is .75 percent (9 percent divided by 12 months).

As an example, when calculating the future value of $10,000 four years from now at an annual interest rate of 9 percent, the following results are obtained:

Compounded Period Formula Result ————————————————————

yearly =FV(9%,4,0,-10000) $14,115.82 quarterly =FV(9%/4,44,0,-10000) $14,276.21 monthly =FV(9%/12,412,0,-10000) $14,314 daily =FV(9%/365,4*365,0,-10000) $14,332.66

= MORE INFORMATION =

This information regarding the number of periods is true for all of the financial functions that take a percentage rate as an argument. The following is a list of the functions:

FV IRR MIRR NPER NPV PMT PV RATE

KBCategory: kbother KBSubcategory: macworkskb

= Additional reference words: 3.00 mac 3.00a mwksss M_eXcel =

Version : 3.0 Platform : MACINTOSH Issue type : kbhowto ============================================================================= Copyright Microsoft Corporation 1998.