Microsoft Office Tutorials and References

In Depth Information

**Interest—IPMT Function**

FIGURE 32.9
The Principal Calculated for All Months

FIGURE 32.10
The Interest Calculated for All Months

Follow the same procedure used for the PPMT to create the IPMT, in the Interest

column. Figure 32.10 shows the calculated results after applying the IPMT function.

Note again that the interest amounts decrease over time. Note that the annual Rate is

6.00 percent and that the monthly rate is 0.5 percent (6.00%/12). If you calculate 0.5

percent of the $600,000, the initial loan, it will be $3,000.00. This is exactly the

monthly interest of Month 1, as calculated by the IPMT function.