Microsoft Office Tutorials and References
In Depth Information
Figure out
LOAN TERMS
You can use Excel’s Payment ( PMT ) function when
buying a house or car. This function enables you to
compare loan terms and make an objective decision
based on factors such as the amount of the monthly
payment.
You can calculate loan payments in many ways when
using Excel, but using the PMT function may be the
simplest because you merely enter the arguments
into the Function Wizard. To make your job even
easier, enter your argument values into your
worksheet before launching the wizard. Then by
clicking in a cell, you can enter the value of the cell
into the wizard.
The PMT function takes three required arguments. For
RATE , enter an annual interest rate such as 5 percent
and then type .05 divided by 12 to calculate the
monthly rate. For NPER , number of periods, enter
the number of loan periods for the loan you are
seeking. For PV , present value, enter the amount of
the loan. The monthly payment appears surrounded
by parentheses, signifying that the number is
negative, or a cash outflow.
1
Type the principal (the present
value), interest rate, and number
of periods.
3
2
Click in the cell in which you
want the result to appear.
3
Click the Insert Function button.
1
2
l The Insert Function dialog box
appears.
4
Click here and select Financial.
5
Double-click PMT.
4
5
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