Calculates the payment for a loan based on constant payments and a constant interest rate.
Syntax
PMT(rate,nper,pv,fv,type)
For a more complete description of the arguments in PMT, see the PV function.
Rate is the interest rate for the loan.
Nper is the total number of payments for the loan.
Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal.
Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.
Type is the number 0 (zero) or 1 and indicates when payments are due.
Set type equal to | If payments are due |
---|---|
0 or omitted | At the end of the period |
1 | At the beginning of the period |
To find the total amount paid over the duration of the loan, multiply the returned PMT value by nper.
Example 1
The example may be easier to understand if you copy it to a blank spreadsheet.
Selecting an example from Help
Data | Description |
---|---|
8% | Annual interest rate |
10 | Number of months of payments |
10000 | Amount of loan |
Formula | Description (Result) |
=PMT(A2/12, A3, A4) | Monthly payment for a loan with the above terms (-1,037.03) |
=PMT(A2/12, A3, A4, 0, 1) | Monthly payment for a loan with the above terms, except payments are due at the beginning of the period (-1,030.16) |
Example 2
You can use PMT to determine payments to annuities other than loans.
The example may be easier to understand if you copy it to a blank spreadsheet.
Selecting an example from Help
Data | Description |
---|---|
6% | Annual interest rate |
18 | Years you plan on saving |
50,000 | Amount you want to have save in 18 years |
Formula | Description (Result) |
=PMT(A2/12, A3*12, 0, A4) | Amount to save each month to have 50,000 at the end of 18 years (-129.08) |
Note The interest rate is divided by 12 to get a monthly rate. The years the money is paid out is multiplied by 12 to get the number of payments.