Fresh Excel Tips

To determine the payment amount for a loan based on constant payments and a constant interest rate, you can use the PMT function. Here is the syntax that is used:

PMT(rate, nper, pv, fv, type)
rate: The interest rate of the loan.
nper: The total number of payments for the loan.
pv: The present value. This is also referred to as the principal.
fv: The future value. This is the amount you want after the last payment is made. If fv is omitted, it is assumed to be 0.
type: A number that indicates when payments are due. 0 or omitted indicates the end of the period, and 1 indicates the beginning of the period.

To determine the payment for a loan:

1. In cell B1 enter the interest rate.
2. In cell B2 enter the number of periods in months.
3. In cell B3 enter the amount of the loan.
4. In cell B5 calculate the payment after one month with the following formula: =-PMT($B$1/12,$B$2,$B$3).
5. Press Enter.

This tip is compatible with Excel 97, 2000, 2003 and 2007.

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