The PDURATION function in Google Sheets is a powerful tool designed to assist users in determining the time required for an investment to grow to a certain value, given a specific interest rate. This function is especially useful for financial analysts, investors, and individuals aiming to assess their investment timelines and strategies.

Syntax

PDURATION(rate, present_value, future_value)

• rate: The interest rate for each period, expressed as a decimal.
• present_value: The initial amount of money invested or the current value.
• future_value: The target amount that you want the investment to reach.

Example #1

PDURATION(0.05, 1000, 1500)

This function calculates the number of periods needed for an investment of $1,000 to grow to $1,500 at an interest rate of 5% per period. For this calculation, the result would be approximately 8.14 periods.

Example #2

PDURATION(0.04, 2000, 4000)

Here, the function determines how many periods it takes for an investment of $2,000 to double to $4,000 at a 4% interest rate. The result indicates around 17.67 periods.

Example #3

PDURATION(0.03, 500, 1000)

In this scenario, the function evaluates the number of periods needed for $500 to reach $1,000 with a 3% interest rate per period. This results in approximately 23.45 periods.

Error handling

• NUM!: This error occurs if the present value is greater than or equal to the future value, indicating that it’s impossible to achieve the target value under the given conditions.
• VALUE!: This error is returned if any of the function inputs are non-numeric, ensuring that all parameters are in the correct format for calculation.
• DIV/0!: This error appears when the rate is set to zero, leading to division by zero in the calculation, which is undefined.

Conclusion

The PDURATION function is instrumental for anyone looking to estimate the time it will take for their investments to grow based on a fixed interest rate. By understanding the interplay between present value, future value, and interest rate, users can make more informed financial decisions and strategies.