Wednesday, March 9, 2011

Excel financial formulas - PMT

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

Pmt( interest_rate, number_payments, PV )
PV : Present Value

To find out the monthly payment on a 1,000,000 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, 1000000)

Reference:
http://www.techonthenet.com/excel/formulas/pmt.php
http://www.masterhsiao.com.tw/ExcelFinance/PMT/PMT.htm

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