NPER function is used to return the calculated number of payment installment periods. It is a built-in Excel function and it is classified as a financial function. This function is used to retrieve the number of installments paid over a period of time using the specified parameters (loan or investment), the regular payment over the given period of time and the interest rate.
The general formula
=NPER (rate, pmt, pv, [fv], [type])
rate – This represents the given interest rate over a period of time.
pmt – This is the regular payment amount made over each period
pv – This indicates the present value of payment made at the moment.
fv – Setting this argument is optional. It represents the future value. It is set by default to zero.
type – This is also optional. It shows when payment is expected.
0 – end of the period. 1 = start of the period. The present value is 0.
Figure 1. Using Excel NPER function
How to use the NPER function
The function is used to return the number of times a payment should be made (installments) for a loan or an investment using the amount given, the amount to be paid at regular intervals and the interest rate.
PMT- it includes the principal amount and the interest accrued. It, however, does not include reserve payments or taxes.