How to use the PDURATION function
What is the PDURATION function?
The PDURATION function calculates how many periods required by an investment to reach a given amount based on a percentage rate. PDURATION stands for price duration.
What is an investment?
An investment is an asset or business acquired with the goal of generating income or appreciation, the purpose is to grow the money over time.
What are periods?
A payment period is the length of time between payments made on a loan or investment. For example, a loan with monthly payments the payment period would be one month. A loan with quarterly payments the payment period would be three months.
What is present value?
The present value is the initial amount that will earn interest/dividend.
What is future value?
The compounded amount after the calculated periods based on the given rate. It measures what a current capital (present value) amount will be worth at a designated future date.
Related functions
| Function | Description |
|---|---|
| RATE(nper, pmt, pv, [fv], [type]) | Returns the interest rate per period of an annuity |
| PV(rate, nper, pmt, [fv], [type]) | Returns the present value of an investment. |
| FV(rate, nper, pmt, [pv], [type]) | Returns the future value of an investment. |
| PDURATION(rate, pv, fv) | Returns the periods needed for an investment to reach a future value. |
PDURATION Function Syntax
PDURATION(Rate, Pv, Fv)
PDURATION Function Arguments
| Rate | Required. Rate is the interest rate per period. |
| Pv | Required. Pv is the present amount of the investment. |
| Fv | Required. Fv is the desired future amount of the investment. |
PDURATION function example
Formula in cell C7:
PDURATION not working
The PDURATION function returns
- #VALUE error if invalid data types are used.
- #NUM error if argument values are invalid.
Positive values are required as arguments.
How is the PDURATION function calculated?
The following formula calculates the exact same thing as the PDURATION function.
PDURATION = (log(Fv)-log(Pv))/log(1+r)
Fv - Future value
Pv - Present value
r - rate
Formula in cell C5:
The LOG function calculates the logarithm of a number to a specific base.
Function syntax: LOG(number, [base])
Functions in 'Financial' category
The PDURATION function function is one of many functions in the 'Financial' category.
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