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| Functions and CALL Routines |
COMPOUND Function
Returns compound interest parameters.
| Category: | Financial |
| Syntax | |
| Arguments | |
| Details | |
| Examples |
Syntax |
| COMPOUND(a,f,r,n) |
Arguments
- a
-
is numeric, and specifies the initial amount.
Range: a ![[ge]](../../../../common/63294/HTML/default/images/ge.gif)
0 - f
-
is numeric, and specifies the future amount (at the end of n periods).
Range: f 0 - r
-
is numeric, and specifies the periodic interest rate expressed as a fraction.
Range: r 0 - n
-
is an integer, and specifies the number of compounding periods.
Range: n 0
| Details |
The COMPOUND function returns the missing argument in the list of four arguments from a compound interest calculation. The arguments are related by the following equation:
![[equation]](images/deqn60.gif)
One missing argument must be provided. A compound interest parameter is then calculated from the remaining three values. No adjustment is made to convert the results to round numbers.
If n=0, then
![[equation]](images/leqn32.gif)
and
![[equation]](images/leqn33.gif)
are equal to 1.
Note: If you choose r
as your missing value, then COMPOUND returns an error. ![[cautionend]](../../../../common/63294/HTML/default/images/cautend.gif)
| Examples |
The accumulated value of an investment of $2000 at a nominal annual interest rate of 9 percent, compounded monthly after 30 months, can be expressed as
future=compound(2000,.,0.09/12,30);
The value returned is 2502.54. The second argument has been set to missing, indicating that the future amount is to be calculated. The 9 percent nominal annual rate has been converted to a monthly rate of 0.09/12. The rate argument is the fractional (not the percentage) interest rate per compounding period.
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Copyright © 2011 by SAS Institute Inc., Cary, NC, USA. All rights reserved.