Excel PMT Function

Summary

The Excel PMT function is a financial function that returns the periodic payment for a loan. You can use the NPER function to figure out payments for a loan, given the loan amount, number of periods, and interest rate.

Purpose

Get the periodic payment for a loan

Return value

loan payment as a number

Syntax

=PMT (rate, nper, pv, [fv], [type])

Arguments

rate - The interest rate for the loan.
nper - The total number of payments for the loan.
pv - The present value, or total value of all loan payments now.
fv - [optional] The future value, or a cash balance you want after the last payment is made. Defaults to 0 (zero).
type - [optional] When payments are due. 0 = end of period. 1 = beginning of period. Default is 0.

Usage notes

The PMT function can be used to figure out the future payments for a loan, assuming constant payments and a constant interest rate. For example, if you are borrowing $10,000 on a 24 month loan with an annual interest rate of 8 percent, PMT can tell you what your monthly payments be and how much principal and interest you are paying each month.

Notes:

The payment returned by PMT includes principal and interest but will not include any taxes, reserve payments, or fees.
Be sure you are consistent with the units you supply for rate and nper. If you make monthly payments on a three-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 3*12 for nper. For annual payments on the same loan, use 12 percent for rate and 3 for nper.