||PMT is used to calculate the periodic (weekly, monthly or yearly) payment required
to pay back an amount borrowed when the loan amount, interest rate and
number of payments are fixed.
To use PMT:
Keep highlighting the abbreviations in the right hand column and noting the description of what each does on the bottom of the dialog box.
So if the yearly interest rate is on the sheet, point at it and divide by 12 for a monthly payment. 24 for bimonthly. etc.
Nper is the number of
payments. If a cell on the sheet, has number of years the loan is for,
point at the number of years and then
multiply that by of payments in a year (52 for weekly, 12 for month).
PV stands for Present Value. How much is the loan worth today, how much is the bank giving you?
As you enter numbers and cell addresses in the boxes, the current value will appear to the right giving you the opportunity to see that you have entered the correct value or cell address.
There is NO need to enter Fv nor Type which are NOT bold..
Press enter or click OK. A negative number will appear since you are taking money out of your pocket.
Manually calculate to see if the number makes sense. It should be more than the amount borrowed dividend by the number of payments since there is interest. But it should be less than the amount borrowed.
|More Help in the Tutorials|
This page was created by Professor Maureen Greenbaum and was last updated on 03/24/09 .
Page Name: Hints for PMT Function
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Copyright: ã Maureen Greenbaum Sumware in NJ 2001, '02, '03, '04, '05, '06, '07, 08, 09, 10, 11, 12, 13. All rights reserved.