PMT Function – Excel Formulas & Function
PMT Function denotes the annuity payment that you need to make including the interest during a particular period of time. This is the very common function in Excel. If you know the interest rate, number of year and the present value you can easily calculate the Annuity payment you need to make.
PMT(rate, nper, pv, [fv], [type])
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PMT stand for Annuity Payment.
Rate stand for the interest rate for the period.
Nper stands for the number of years or the time period for the loan.
PV stand for the Present Value.
FV is an optional argument which stand for the future value.
Type is also an optional argument which stand for when the payment is made at the end, in the beginning. It is assumed that the payment is made at the end of the period.
Example of PMT Function
A loan of Rs. 2,00,000 with monthly payment was taken at an annual interest rate of 9% for a duration of 15 years. What would be the PMT?
Here, Rate =0.75% as we need to make monthly payment so 9%/12 will be 0.75%
Nper = 180 as we need to make monthly payment so 15*12 will be 180
PV = Rs. 2,00,000
The other two arguments in the box bracket are optional.
The Answer will be Monthly Payment of Rs.2028.53
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