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	Spreadsheet Mathematical Functions Data Entry Tips for Functions

PMT

Description: Calculates the loan payment for a loan based on constant payments and constant interest rates.

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.

Remarks:

• The payment returned by PMT includes principal and interest but no taxes, reserve payments or fees sometimes associated with loans.

• Make sure that you are consistent about the units you use for specifying Rate and Nper. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 0.12/12 for Rate and 4*12 for Nper. If you make annual payments on the same loan, use 0.12 percent for Rate and 4 for Nper.

Examples:

• Monthly payment for a loan with the above terms.

PMT(.08/12, 10, 10000, 0, 0) = -1,037.03

• Monthly payment for a loan with the above terms, except payments are due at the beginning of the period.

PMT(.08/12, 10, 10000, 0, 1) = -1,030.16

• Amount to save each month to have 50,000 at the end of 18 years.

PMT(.06/12, 18*12, 0, 50000, 0) = -129.08