Excel - Microsoft Excel Nper Function

Description

The Excel NPER function calculates the number of periods required to pay off a loan, for a specified constant periodic payment and a constant interest rate. 

The syntax of the function is : 

NPER( rate, pmt, pv, [fv], [type] ) 

Where the arguments are as follows: 

Cash Flow Convention :

Note that, in line with the general cash flow convention, outgoing payments are represented by negative numbers and incoming payments are represented by positive numbers. This is seen in the examples below. 

Nper Function Examples

In each of the examples below, the spreadsheet on the left shows the format of the Nper function, and the spreadsheet on the right shows the result. 

Example 1

The following spreadsheet shows the Excel Nper function used to calculate the number of months required to pay off in full, a loan of $50,000 at a rate of $1,000 per month. Interest is charged at a rate of 4% per year, and the payment to the loan is to be made at the end of each month. 

Example 2

In this example, the spreadsheet below shows the Excel Nper function used to calculate the number of quarterly payments of $1,200 that are required to reduce a loan of $9,000 to $5,000. Interest is charged at a rate of 6% per year and the payment to the loan is to be made at the beginning of each quarter. 

Nper Function Errors

If you get an error from the Nper function, this is likely to be one of the following: 

Common Errors 

Also, the following problem is encountered by some users: 

Common Problem 

The Excel NPER function gives a negative result, when a positive one is expected. 

Solution 

This problem usually occurs when the present value and the specified periodic payment both have the same arithmetic sign. If a loan is being paid off, present value should be negative and the payment should be positive (or vice versa)