In mathematics, an integer is a whole number that does not include any fractions or decimals. A period is an interval of time between two predefined events, such as a monthly payment. Integer numbers are necessary to use in calculating a definite number of periods when a variable is present, such as an interest rate.
An integer number of periods is the exact number of periods necessary for a present value to reach a future value. In financing and other economic functions, it is often necessary to incorporate a cumulative variable, such as interest rate. This variable is incorporated with a logarithm so it affects the present value cumulatively at each specified period.
Financial calculations often use integer period functions. For example, a savings account that is affected monthly by a certain interest rate requires you to incorporate the interest rate value over a number of monthly periods in order to determine the value of the account over time. A compounding interest payment schedule also requires an integer function to determine the number of complete months it will take to pay off the initial amount with the inclusion of an interest rate.
You may want to determine how long an initial investment will take to reach a future monetary value. For example, if the present value of an investment is $1000 with a monthly interest return of 1%, the investment will take 41 monthly periods to reach a future value of $1500. Since interest is added to the investment amount each month, this added amount must be incorporated into the function. Also, since interest is only added monthly, the amount of periods must be a whole integer rather than an exact fraction.