PPMT Function
Returns the principal payment for a given period
for a constant payment loan or the periodic savings for a future balance.
Syntax
Required Arguments
- rate
-
specifies the interest
rate per payment period.
- period
-
specifies the payment
period for which the principal payment is computed. period must be a positive integer value that
is less than or equal to the value of number-of-periods.
- number-of-periods
-
specifies the number
of payment periods. number-of-periods must be a positive integer value.
- principal-amount
-
specifies the principal
amount of the loan. Zero is assumed if a missing value is specified.
Optional Arguments
- future-amount
-
specifies the future
amount. future-amount can be
the outstanding balance of a loan after the specified number of payment
periods, or the future balance of periodic savings. Zero is assumed
if future-amount is omitted
or if a missing value is specified.
- type
-
specifies whether the
payments occur at the beginning or end of a period. 0 represents the
end-of-period payments, and 1 represents the beginning-of-period payments.
0 is assumed if type is omitted
or if a missing value is specified.
Example
-
The principal payment amount of
the first monthly periodic payment for a 2-year, $2,000 loan with
a nominal annual interest rate of 10%, is computed as follows:
PrincipalPayment = PPMT(0.1/12, 1, 24, 2000);
This computation returns
a value of 75.62.
-
The principal payment for a 3-year,
$20,000 loan with beginning-of-month payments is computed as follows:
PrincipalPayment2 = PPMT(0.1./12, 1, 36, 20000, 0, 1);
This computation returns
a value of 640.10 as the principal that was paid with the first payment.
-
The principal payment of an end-of-month
payment loan with an outstanding balance of $5,000 at the end of three
years, is computed as follows:
PrincipalPayment3 = PPMT(0.1/12, 1, 36, 20000, 5000, 0);
This computation returns
a value of 389.914 as the principal that was paid with the first payment.