Which financial function indicates the total number of payment periods in an annuity?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Nper.
Nper is the total number of payment periods in an annuity. For example, if this loan is a four-year car loan and makes monthly payments, then loan has 4*12 (or 48) periods. The value for nper will be 48.
OTHER OPTIONS
- Fv is the future value, or a cash balance to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (the future value of a loan).
- Pv is the present value, or the lump-sum amount that a series of future payments is worth right now. If pv is omitted, it is assumed to be 0 (zero), and then include the pmt value in the argument.
- Rate is the interest rate per period.