Microsoft Office Tutorials and References
In Depth Information
Using the PMT Function
The Loan Analysis worksheet includes all the data you need to calculate the monthly
payment required to pay off the mortgage in 20 years at 6 percent interest compounded
monthly. You will enter the PMT function to calculate this value.
To use the PMT function to calculate the monthly payment:
1. Click cell B10 to select it.
2. In the Function Library group on the Formulas tab, click the Financial button, and
then click PMT in the list of financial functions. The Function Arguments dialog
3. In the Rate box, enter the cell reference , which is the cell with the interest rate B5
Be sure to enter the
interest rate per month for the
Rate argument and not
the annual interest rate
for any loan or
investment that has monthly
4. In the Nper box, enter the cell reference , which is the cell with the total B7
ber of monthly payments required to pay back the loan.
5. In the Pv box, enter the cell reference , which is the cell with the present value B8
of the loan. See Figure 3-37.
Function Arguments dialog box for the PMT function
interest rate per
number of months
in which to pay
back the loan
6. Click the OK button. The value $1,432.86 is displayed in parentheses in cell B10 to
indicate a negative currency value. See Figure 3-38.