Question

How to calculate PMT

Answer 1

PMT Function loan payment

PMT (rate ,nper,pv,[fv],[type]

PMT calculation

loan amount $85000

interest rate 4.50%

periods (term in months) 60

cpmponding periods per year 12

  

monthly payment $93.22

  

  

summary

The function is a financial function that returns the periodic payment for a loan. You can use the PMT function to figure out payments for a loan, given the loan amount, number of periods, and interest rate.

Purpose

Get the periodic payment for a loan

Return value

loan payment as a number

Syntax

=PMT (rate, nper, pv, [fv], [type])

Arguments

• rate - The interest rate for the loan.
• nper - The total number of payments for the loan.
• pv - The present value, or total value of all loan payments now.
• fv - [optional] The future value, or a cash balance you want after the last payment is made. Defaults to 0 (zero).
• type - [optional] When payments are due. 0 = end of period. 1 = beginning of period. Default is 0.

Version

2003

Usagse note

The PMT function can be used to figure out the future payments for a loan, assuming constant payments and a constant interest rate. For example, if you are borrowing $10,000 on a 24 month loan with an annual interest rate of 8 percent, PMT can tell you what your monthly payments be and how much principal and interest you are paying each month.

Notes:

• The payment returned by PMT includes principal and interest but will not include any taxes, reserve payments, or fees.
• Be sure you are consistent with the units you supply for rate and nper. If you make monthly payments on a three-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 3*12 for nper. For annual payments on the same loan, use 12 percent for rate and 3 for nper.