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Tag: PMT function

PMT function: Description, Usage, Syntax, Examples and Explanation

What is PMT function in Excel? PMT function is one of the Financial functions in Microsoft Excel that calculates the payment for a loan based on constant payments and a constant interest rate.Use the Excel Formula Coach to figure out a monthly loan payment. At the same time, you’ll learn how to use the PMT function in a formula. Syntax of PMT function PMT(rate,…

Example of payment for annuity in Excel

This tutorial shows how to solve for an annuity payment in Excel. An annuity is a series of equal cash flows, spaced equally in time. Case study:  Using the PMT function, the goal in this example is to have 100,000 at the end of 10 years, with an interest rate of 5%. Payments are made annually, at the end of each…

Calculate payment for a loan in Excel

To calculate a loan payment amount, given an interest rate, the loan term, and the loan amount, you can use the PMT function. Formula =PMT(rate,periods,-amount) Explanation In the example shown, the formula in C10 is: =PMT(C6/12,C7,-C5) How this formula works Loans have four primary components: the amount, the interest rate, the number of periodic payments (the loan term) and a…

PMT, RATE, NPER, PV and FV Financial Functions in Excel

Learn all about Excel’s PMT, RATE, NPER, PV and FV To illustrate Excel’s most popular financial functions, we consider a loan with monthly payments, an annual interest rate of 6%, a 20-year duration, a present value of $150,000 (amount borrowed) and a future value of 0 (that’s what you hope to achieve when you pay off a loan). We make monthly payments, so we use 6%/12 =…