Microsoft Office Tutorials and References
In Depth Information
The interest rate per period. If the rate is expressed as an annual interest rate,
you must divide it by the number of periods in a year.
The total number of payment periods.
A particular period. The period must be less than or equal to nper.
The payment made each period (a constant value that does not change).
The future value after the last payment is made. If you omit fv, it is assumed to
be 0. (The future value of a loan, for example, is 0.)
Indicates when payments are due — either 0 (due at the end of the period) or 1
(due at the beginning of the period). If you omit type, it is assumed to be 0.
Used by the RATE function. An initial estimate of what the result will be. The
RATE function is calculated by iteration. If the function doesn't converge on a
result, changing the guess argument will help.
The PMT function returns the loan payment (principal plus interest) per period, assuming constant payment
amounts and a fixed interest rate. The syntax for the PMT function is
The following formula returns the monthly payment amount for a $5,000 loan with a 6% annual percentage
rate. The loan has a term of four years (48 months).
This formula returns $117.43, the monthly payment for the loan. The first argument, rate, is the annual rate di-
vided by the number of months in a year. Also, notice that the third argument (pv, for present value) is negative
and represents money owed.
The PPMT function returns the principal part of a loan payment for a given period, assuming constant payment
amounts and a fixed interest rate. The syntax for the PPMT function is
The following formula returns the amount paid to principal for the first month of a $5,000 loan with a 6% annu-
al percentage rate. The loan has a term of four years (48 months).