Microsoft KB Archive/33058

Mac Works: Accuracy of Financial Functions in Spreadsheet

PSS ID Number: Q33058 Article last modified on 10-22-1998

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= SUMMARY =

In the Microsoft Works Spreadsheet module, the results returned by a financial function will vary depending on the number of periods by which the function is calculated. Any number of periods can be selected during a year. Commonly used numbers of periods are “1” (for annual calculations), “12” (for monthly calculations), or “360” (for daily calculations).

= MORE INFORMATION =

For example, to determine the amount of money to invest at 9 percent for one year to return an ending value of $10,000, use the present value function (PV). Different results will be returned depending on the number of periods used to determine the method of compounding interest. The following answers will be returned for various choices of periods:

Number of Periods Result —————– ——

1 (compounded yearly)     $9,174.31 12 (compounded monthly)    $9,142.38 360 (compounded daily) $9,139.41

This information regarding the number of periods is true for all financial functions that take a percentage rate as an argument. These functions are as follows: FV, IRR, MIRR, NPER, NPV, PMT, PV, and RATE.

KBCategory: kbother KBSubcategory: macworkskb

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Version : 1.0 1.1 2.0 3.0 Platform : MACINTOSH Issue type : kbinfo ============================================================================= Copyright Microsoft Corporation 1998.