Microsoft KB Archive/214150

= XL: Adjusting the Period of Financial Functions =

Article ID: 214150

Article Last Modified on 1/24/2007

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APPLIES TO


 * Microsoft Excel 2000 Standard Edition
 * Microsoft Excel 97 Standard Edition
 * Microsoft Excel 95 Standard Edition
 * Microsoft Excel 95a
 * Microsoft Excel 2001 for Mac
 * Microsoft Excel 98 for Macintosh

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This article was previously published under Q214150



SUMMARY
The compounded period used by Microsoft Excel 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 has 48 periods (4 years times 12 months). You need to type the rate as the rate for each period.

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

As an example, when you calculate the future value of $10,000 four years from now at an annual interest rate of 9 percent, Microsoft Excel returns the following results:   Compounded Period     Formula                      Result -    ---                      --   yearly                =FV(9%,4,,-10000)            $14,115.82 quarterly            =FV(9%/4,4*4,,-10000)        $14,276.21 monthly              =FV(9%/12,4*12,,-10000)      $14,314 daily                =FV(9%/365,4*365,,-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 those functions:

FV

IRR

IPMT

MIRR

NPER

NPV

PMT

PPMT

PV

RATE

Additional query words: xl2k xl2000 XL2001 XL98 XL97 XL7

Keywords: kbhowto KB214150

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