PMT function in Excel
The PMT function in Excel helps to calculate, among many other parameters, the equal monthly instalments on the loan taken.
Who hasn’t taken a loan? Whether you are an individual, small business, large business or the government, everybody is borrowing money. How much do you pay back every month on your loan based on certain criteria? Microsoft Excel has a lovely ‘loan calculator’. You can also calculate other parameters like the future value (FV) or the interest rate, depending on what solution you are looking for in the PMT Microsoft Excel function. Check out the Excel training video below.
How to implement the ‘PMT’ function:
- First input the data as shown in the training video
- Click on the drop-down arrow next to the ‘sigma’ sign
- Select ‘more functions..’
- Type ‘pmt’ in the search box and click ‘go’
- Select the ‘pmt’ function
- A new dialogue box appears
- Follow the instructions to input your data. For example, if you are paying an equal monthly installment on the loan taken, you will enter ‘interest rate/12’, if your interest rate is defined as ‘per annum’
- Once you have input all the necessary data in the Excel dialogue box, you can see the reult immediately and also correct any errors
- Click ‘OK’ to finish as shown in the Excel training video.