Returns the number of compounding periods required for an investment at a present value to reach a future value earning a fixed interest rate.
Syntax:
CTERM(interest:Number, future_value:Number, present_value:Number)
where:
interest | is the interest rate per period, expressed as a decimal fraction; |
future_value | is the desired future value of the investment; |
present_value | is the present value of the investment. |
Formula:
CTERM = LN(future_value< ÷ present_value) ÷ LN(1 + interest)
Example:
How long would it take for £1000 to grow into £2000 at an interest rate of 10% per annum?
The formula
CTERM(0.10, 2000, 1000)
returns the number of periods, 7.27
(years).