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PMT Function

The Pmt function in Excel returns the payment amount for a loan based on the interest rate, number of payments, present value or principal of the loan, and future value. The syntax includes interest_rate, number_payments, PV, FV, and Type parameters. It can return monthly, weekly or annual payments and handles loans that are paid off or have a remaining balance.

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113 views

PMT Function

The Pmt function in Excel returns the payment amount for a loan based on the interest rate, number of payments, present value or principal of the loan, and future value. The syntax includes interest_rate, number_payments, PV, FV, and Type parameters. It can return monthly, weekly or annual payments and handles loans that are paid off or have a remaining balance.

Uploaded by

dbista
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Excel: Pmt Function

In Excel, the Pmt function returns the payment amount for a loan based on an interest rate and a
constant payment schedule.

The syntax for the Pmt function is:


Pmt( interest_rate, number_payments, PV, FV, Type )
interest_rate is the interest rate for the loan.
number_payments is the number of payments for the loan.
PV is the present value or principal of the loan.
FV is optional. It is the future value or the loan amount outstanding after all payments have been made.
If this parameter is omitted, the Pmt function assumes a FV value of 0.
Type is optional. It indicates when the payments are due. Type can be one of the following values:
Value Explanation
0 Payments are due at the end of the period.
(default)
1 Payments are due at the beginning of the period.
If the Type parameter is omitted, the Pmt function assumes a Type value of 0.

Applies To:
 Excel 2007, Excel 2003, Excel XP, Excel 2000

For example:
Let's take a look at a few examples:
This first example returns the monthly payment on a $5,000 loan at an annual rate of 7.5%. The loan is
paid off in 2 years (ie: 2 x 12). All payments are made at the beginning of the period.
=Pmt(7.5%/12, 2*12, 5000, 0, 1)

This next example returns the weekly payment on a $8,000 loan at an annual rate of 6%. The loan is paid
off in 4 years (ie: 4 x 52). All payments are made at the end of the period.
=Pmt(6%/52, 4*52, 8000, 0, 0)

This next example returns the annual payment on a $6,500 loan at an annual rate of 5.25%. The loan is
paid off in 10 years (ie: 10 x 1). All payments are made at the end of the period.
=Pmt(5.25%/1, 10*1, 6500, 0, 0)

This final example returns the monthly payment on a $5,000 loan at an annual rate of 8%. The loan is
paid on for 3 years (ie: 3 x 12) with a remaining balance on the loan of $1,000 after the 3 years. All
payments are made at the end of the period.
=Pmt(8%/12, 3*12, 5000, 1000, 0)

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