I. Intro
The PMT function returns the fixed payment amount for the loan.
II. About the function
- Formula: =PMT(rate,nper,pv,[fv],[type])
- Parameters:
- rate (required): The interest rate of the loan.
- nper (required): The total number of payment periods for this loan.
- pv (required): The present value, or the sum of the current value of a series of future payments; also known as the principal.
- [fv] (optional): The future value, or the cash balance you would like to receive after the last payment. If this parameter is omitted, then it's assumed to be 0, meaning the future value of the loan is 0.
- [type] (optional): The numbers 0 and 1 represent whether payments are due at the beginning or at the end of a period respectively.
- Example: =PMT(1%,360,100000,0,0)
- Note:
- The payments from the PMT function include the principal and interest, but don't take into account taxes, reserve payments, or fees related to loans.
- Please ensure that the units for the interest rate and total payment periods are consistent. For a four-year loan on an interest rate of 12% that is paid monthly, the rate should be 12%/12, and nper should be 4*12. For the same loan that is paid annually, then the rate should be 12%, and nper should be 4.
- If you want to calculate the total amount paid during the loan period, you can multiply the value returned by the PMT function by the total number of periods.
III. Steps
Use the PMT function
- Select a cell and enter =PMT.
- Enter the parameters in the cell. For example: =PMT(B2/12,B3,B4).
- Press Enter to display the result, which is -8652.67461 in this example.
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Delete the PMT function
Select the cell with the PMT function, and press Delete.