The `PDURATION` function in Excel is used to calculate the number of periods required for an investment to grow to a specified value at a given interest rate. This function is primarily used in financial analysis to understand how long it will take for an investment to reach a target future value given a certain rate of return.
Here is the syntax for the `PDURATION` function:
PDURATION(rate, pv, fv)
- rate: The interest rate per period. This argument is required and typically expressed as a decimal. For example, for a 5% interest rate, you should input 0.05.
- pv: The present value of the investment. This argument is also required and represents the initial amount of money invested or loaned.
- fv: The future value of the investment. This argument is required and represents the target or desired amount you want the investment or loan to grow to.
Example:
Suppose you have invested $10,000, and you want it to grow to $20,000 with an annual interest rate of 7%. You want to know how many years it will take to reach your target amount.
You would use the `PDURATION` function as follows:
=PDURATION(0.07, 10000, 20000)
This formula will return the number of periods (in this case, years) it will take for your investment to grow from $10,000 to $20,000 at an interest rate of 7%.
Notes:
- Ensure the units of the interest rate and the periods are consistent. If the interest rate is annual, the result will be in years. If the rate is monthly, the result will be in months.
- The `PDURATION` function will return a result as a decimal number, which may need to be rounded depending on your specific requirement or context.
- This function assumes compound interest for growth calculations.
By using `PDURATION`, you can efficiently plan investment timelines or loan repayment periods when working with compound interest scenarios in Excel.
Unlock Your Potential
Excel
Access
Power BI
