PMT Function
Returns the periodic payment for a constant payment
loan or the periodic savings for a future balance.
Syntax
Required Arguments
rate
specifies the interest
rate per payment period.
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 monthly payment for a $10,000
loan with a nominal annual interest rate of 8% and 10 end-of-month
payments can be computed in the following ways:
Payment1 = PMT(0.08/12, 10, 10000, 0, 0);
Payment1 = PMT(0.08/12, 10, 10000);
These computations
return a value of 1037.03.
-
If the same loan has beginning-of-period
payments, then payment can be computed as follows:
Payment2 = PMT(0.08/12, 10, 10000, 0, 1);
This computation returns
a value of 1030.16.
-
The payment for a $5,000 loan earning
a 12% nominal annual interest rate, that is to be paid back in five
monthly payments, is computed as follows:
Payment3 = PMT(.01, 5, -5000);
This computation returns
a value of –1030.20.
-
The payment for monthly periodic
savings that accrue over 18 years at a 6% nominal annual interest
rate, and which accumulates $50,000 at the end of the 18 years, is
computed as follows:
Payment4 = PMT(0.06/12, 216, 0, 50000, 0);
This computation returns
a value of 129.081.