PMT+Function

The PMT function is used to calculate payments for a loan or a future value of an investment.It calculates monthly payments based on the loan amount, interest rate, and length of time it will take to pay back the money.The formula is as follows: =PMT (rate,nper,pv,fv,type)

rate-the annuel interest rate for the loan.

nper-total number of payments for the loan.

pv-principal of the loan, or the present value borrowed.

fv-this will be $0 for a loan.

type-when payments are due 1) 0-at the end (month, year) 2) 1-at the beginning (")

Ex)Find the monthly interest on a $10,000, 3 yr. loan at 9% (.09) interest. Formula: =PMT(.09/12,3*12,10000)

-.09/12 is the interest rate per period(montly interest rate equals the annual interest rate divided by 12 months)

-3*12 is the total number of payments (the number of years of the loan multiplied by 12 months)

-10,000 is loan amount. ......**sanchezm13, Info 273, Professor Colucci**

__**Hey guys here is a useful tip on how to use the PMT function in Excel, i hope it can help knowing we have to use it in the incoming Excel Intro Case.**__

Well first to look for it you have to go to Formulas on the ribbon

Then go to Insert Function

And then look for the PMT function in Select a Function.

It is used to calculate the payments for a loan or the future value of an investment.
 * Purpose of the PMT Function:**


 * __Here is how it works guys__**

The syntax is = PMT(rate,nper,pv,fv,type)

rate= here you put the annual interest rate for the loan.

nper= here you put the total number of payments for the loan. pv= here you put the present value or principal of the loan or the amount borrowed. fv= this part is optional beacuse it is the future value or the loan amount outstanding after all payments had been made. And if this part is omitted the PMT function assumes a value of 0.

type= this part indicates when payments are due and it can be two values which are 0 and 1: If is 0 it indicates that payments are due at the end of the period. If is 1 it indicates that payment are due at the beginning of the period.

If you ommited this part the PMT function also assumes a value of 0.




 * __Now guys this is my way of understanding it and i hope i help in a way, but we also have the tutorial and many other sources on how to use the function.__**


 * David Ocanto**
 * Info 273**
 * Professor William Colucci**

David, This is really useful and well thought out. I liked the part where you took actual screen shots and showed the reader how to use it and calculate it, showing the PAYMENT formula. Great work and very detailed.

Alessandra