Documentation/How Tos/Calc: PMT function

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PMT

Returns the payment per period for a fixed rate loan.

Syntax:

PMT(rate; numperiods; principal; finalbalance; type)

rate: the interest rate per period.
numperiods: the total number of payment periods in the term.
principal: the initial sum borrowed.
finalbalance: the cash balance you wish to attain at the end of the term (optional - defaults to 0). With a loan, this would normally be 0.
type: when payments are made (optional - defaults to 0):
0 - at the end of each period.
1 - at the start of each period.

See the examples for how this function can be used for building up savings with fixed regular payments.

Example:

PMT(5.5%/12; 12*2; 5000; 0; 0)

returns -220.48 in currency units. You take out a 2 year loan of 5000 currency units at a yearly interest rate of 5.5%, making monthly payments at the end of the month. You pay 220.48 currency units each month; it is given as negative because you pay it.

PMT(5%/12; 12*2; 0; 1000; 1)

returns -39.54 in currency units. You wish to save 1000 currency units over 2 years, making monthly payments, beginning today. You assume the rate will remain the same at 5%. Interest is compounded monthly. If you save 39.54 currency units each month, the value at the end of 2 years will be 1000 currency units.

See also:

CUMIPMT, CUMIPMT_ADD, IPMT, PPMT, CUMPRINC, CUMPRINC_ADD

Derivation of Financial Formulas

Financial functions

Issues:

  • PMT formats the result as currency if the cell has default formatting. It thus displays a real currency amount. The amount returned by PMT may still be fractional - the display rounds this to the nearest real currency. Note that your loan provider might round in a different way (for example always downwards).
  • If type is 1, payments are made at the start of each period, including at the start of the first period - in other words, the first payment is made on the same day the loan is taken out. It is not clear if any loans are actually arranged on this basis.
  • With tiny rate values, Calc (in common with Excel) may produce an error. This has no impact in a real world calculation. See Issue 91870.
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