Microsoft Office Tutorials and References
In Depth Information
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.