number_of_periods

Evaluates the number of periods for an investment for which periodic and constant payments are made and the interest rate is constant.

Synopsis

#include <imsl.h>

float imsl_f_number_of_periods (float rate, float payment, float present_value, float future_value, int when)

The type double function is imsl_d_number_of_periods.

Required Arguments

float rate (Input)
Interest rate on the investment.

float payment (Input)
Payment made on the investment.

float present_value (Input)
The current value of a stream of future payments, after discounting the payments using some interest rate.

float future_value (Input)
The value, at some time in the future, of a current amount and a stream of payments.

int when (Input)
Time in each period when the payment is made, either IMSL_AT_END_OF_PERIOD or IMSL_AT_BEGINNING_OF_PERIOD. For a more detailed discussion on when see the Usage Notes section of this chapter.

Return Value

The number of periods for an investment.

Description

Function imsl_f_number_of_periods computes the number of periods for an investment based on periodic, constant payment and a constant interest rate.

It can be found by solving the following:

If rate =0

 

If rate ≠ 0

 

Example

In this example, imsl_f_number_of_periods computes the number of periods needed to pay off a $20,000 loan with a monthly payment of $350 and an annual interest rate of 7.25%. The payment is made at the beginning of each period.

 

#include <stdio.h>

#include <imsl.h>

 

int main()

{

float rate = 0.0725 / 12;

float payment = -350.;

float present_value = 20000;

float future_value = 0.;

int when = IMSL_AT_BEGINNING_OF_PERIOD;

float number_of_periods;

 

number_of_periods = imsl_f_number_of_periods (rate, payment,

present_value, future_value, when);

 

printf ("Number of payment periods = %f.\n", number_of_periods);

}

Output

 

Number of payment periods = 70.