PMT

See Also

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

Remarks

Tip

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.

How?

  1. Create a blank spreadsheet.
  2. Select the example in the Help topic.

    Selecting example from Help

    Selecting an example from Help

  3. Press CTRL+C.
  4. In the spreadsheet, select cell A1, and press CTRL+V.
  5. To switch between viewing the formula that returns the result and the result in the cell, select the cell and press F2 and then ENTER, or click Commands and Options on the spreadsheet toolbar, click the Formula tab, and look in the Formula in active cell (active cell) box.
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.

How?

  1. Create a blank spreadsheet.
  2. Select the example in the Help topic.

    Selecting example from Help

    Selecting an example from Help

  3. Press CTRL+C.
  4. In the spreadsheet, select cell A1, and press CTRL+V.
  5. To switch between viewing the formula that returns the result and the result in the cell, select the cell and press F2 and then ENTER, or click Commands and Options on the spreadsheet toolbar, click the Formula tab, and look in the Formula in active cell (active cell) box.
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.