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PMT

See Also

Calculates the payment for a loan based on constant payments and a constant interest rate.

Syntax

PMT(rate,nper,pv,fv,type)

For a more complete description of the arguments in PMT, see the PV function.

Rate    is the interest rate for the loan.

Nper    is the total number of payments for the loan.

Pv    is the present value, or the total amount that a series of future payments is worth now; also known as the principal.

Fv    is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.

Type    is the number 0 (zero) or 1 and indicates when payments are due.

Set type equal to If payments are due
0 or omitted At the end of the period
1 At the beginning of the period

Remarks
The payment returned by PMT includes principal and interest but no taxes, reserve payments, or fees sometimes associated with loans.
Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12 percent for rate and 4 for nper.
Tip

To find the total amount paid over the duration of the loan, multiply the returned PMT value by nper.

Example 1

The example may be easier to understand if you copy it to a blank worksheet.

How?

Create a blank workbook or worksheet.
Select the example in the Help topic. Do not select the row or column headers.


Selecting an example from Help

Press CTRL+C.
In the worksheet, select cell A1, and press CTRL+V.
To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Tools menu, point to Formula Auditing, and then click Formula Auditing Mode.
   
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A B
Data Description
8% Annual interest rate
10 Number of months of payments
10000 Amount of loan
Formula Description (Result)
=PMT(A2/12, A3, A4) Monthly payment for a loan with the above terms (-1,037.03)
=PMT(A2/12, A3, A4, 0, 1) Monthly payment for a loan with the above terms, except payments are due at the beginning of the period (-1,030.16)


Example 2

You can use PMT to determine payments to annuities other than loans.

The example may be easier to understand if you copy it to a blank worksheet.

How?

Create a blank workbook or worksheet.
Select the example in the Help topic. Do not select the row or column headers.


Selecting an example from Help

Press CTRL+C.
In the worksheet, select cell A1, and press CTRL+V.
To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Tools menu, point to Formula Auditing, and then click Formula Auditing Mode.
   
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A B
Data Description
6% Annual interest rate
18 Years you plan on saving
50,000 Amount you want to have save in 18 years
Formula Description (Result)
=PMT(A2/12, A3*12, 0, A4) Amount to save each month to have 50,000 at the end of 18 years (-129.08)


Note  The interest rate is divided by 12 to get a monthly rate. The number of years the money is paid out is multiplied by 12 to get the number of payments.

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