Microsoft Excel Function: PMT (Payment)

Microsoft Excel Functions

Microsoft Excel Functions

If you have never checked out all the Functions available in Microsoft Excel, it is well worth your time to check them out. A function is simply a formula you don’t have to create. Simply fill in the values and the function will return a result. Today’s function is the PMT function. PMT is short for “Payment”. If you’ve ever needed to calculate what the payments would be on a loan amount this is your function.

The PMT function has 5 variables (also known as “arguments”).

Required Arguments

PMT Variables

PMT Variables

Rate: The interest rate to be used. If you want to annualize the rate you would divide the rate by 12.
(Example: 6%/12)

NPER: Number of periods/payments.

PV: Present Value or Loan Amount.

Optional Arguments

FV: Future Value. Essentially, it is the final payment amount (a balloon payment is an example).

TYPE: Logical value of 1 or 0 where 1 means payment is calculated from the beginning of the period, 0 means payment is calculated from the end of the month. The default is 0.

Once you’ve entered the arguments, the PMT function will generate a payment amount.

Calculate a payment

Calculate a payment

Note: The resulting value will be returned as a negative. (I assume that’s because when you make a payment it comes out of your bank account.)

Be sure to come back for more Microsoft Office tips and tricks.

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About sandyluedke

Sandy has been a successful realtor in North Texas for over 25 years. She was consistently a top 100 producer in Texas, with Remax for many years. Sandy founded Ideal Real Estate Group as a way to not only continue to do what she does best...selling and listing homes...but as a broker to share her vast knowledge by mentoring new or struggling agents.
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2 Responses to Microsoft Excel Function: PMT (Payment)

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