PMT( ) function

Returns the amount of the periodic payment required to pay off a loan.

Syntax

PMT(rate, periods, amount <,type>)

Parameters

rate

Numeric. The interest rate per period.

periods

Numeric. The number of payment periods over the term of the loan.

amount

Numeric. The principal amount of the loan.

type

Numeric constant. Specifies whether payments are due at the beginning or end of the period. Use the default of 0 for payments that are due at the end of a period. Use 1 for payments that are due at the beginning of a period.

Output

Numeric.

Remarks

You can use this function to determine the size of the payments that are required to repay an investment or loan, assuming constant payments and a constant interest rate.

You must use consistent units to specify rate and periods. For example, if you make monthly payments on a two-year loan at a rate of 6 percent, use 0.06/12 for rate and 2 * 12 for periods. If you make annual payments on the same loan, use 0.06 for rate and 2 for periods.

The return value includes principal and interest only.

Example

The following example calculates the amount of the payments at the end of each month on a three-year $9600 loan at 8.5 percent compounded monthly:

PMT(.085/12, 3*12, 9600)

returns 303.05. The amount of the payment is $303.05.



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