A couple want to save $100,000 to pay for their daughter's education. They put $2,000 into a fund at the beginning of every month. Interest is compounded monthly at a nominal rate of 7%. How long does it take for the fund to reach $100,000?
Answer : Calculation of Number of years that will take the fund to reach $100000
Using NPER function of Excel we can calculate number of years
where rate is rate of interest per interest i.e 7%/12
pmt is the periodic payment i.e 2000
pv is the present value i.e 0
fv is the future value i.e 100000
type is 1 as the payments are made beginning of every month.
On putting this values
NPER will return 43.77684 months or 3.65 years (43.77684 / 12)
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