PMT( ) function
Returns the amount of the periodic payment (principal + interest) required to pay off a loan.
Syntax
PMT(rate, periods, amount <,type>)
Parameters
Name | Type | Description |
---|---|---|
rate | numeric |
The interest rate per period. |
periods | numeric |
The total number of payment periods. |
amount | numeric |
The principal amount of the loan. |
type optional |
numeric |
The timing of payments:
If omitted, the default value of 0 is used. |
Note
You must use consistent time periods when specifying rate and periods to ensure that you are specifying interest rate per period.
For example:
- for monthly payments on a two-year loan or investment with interest of 5% per annum, specify 0.05/12 for rate and 2 * 12 for periods
- for annual payments on the same loan or investment, specify 0.05 for rate and 2 for periods
Output
Numeric.
Examples
Basic examples
Returns 1856.82, the monthly payment (principal + interest) required to pay off a twenty-five year, $275,000 loan at 6.5% per annum, with payments due at the end of the month:
PMT(0.065/12, 12*25, 275000, 0)
Returns 1846.82, the monthly payment (principal + interest) required to pay off the same loan, with payments due at the beginning of the month:
PMT(0.065/12, 12*25, 275000, 1)
Advanced examples
Annuity calculations
Annuity calculations involve four variables:
- present value, or future value $21,243.39 and $ 26,973.46 in the examples below
- payment amount per period $1,000.00 in the examples below
- interest rate per period 1% per month in the examples below
- number of periods 24 months in the examples below
If you know the value of three of the variables, you can use an Analytics function to calculate the fourth.
I want to find: | Analytics function to use: |
---|---|
Present value |
PVANNUITY( ) Returns 21243.39: PVANNUITY(0.01, 24, 1000) |
Future value |
FVANNUITY( ) Returns 26973.46: FVANNUITY(0.01, 24, 1000) |
Payment amount per period |
PMT( ) Returns 1000: PMT(0.01, 24, 21243.39) |
Interest rate per period |
RATE( ) Returns 0.00999999 (1%): RATE(24, 1000, 21243.39) |
Number of periods |
NPER( ) Returns 24.00: NPER(0.01, 1000, 21243.39) |
Annuity formulas
The formula for calculating the present value of an ordinary annuity (payment at the end of a period):
The formula for calculating the future value of an ordinary annuity (payment at the end of a period):