![]() To get a value for pv (the present value), we use -C9, which converts the loan amount to -450,000. We use a minus operator to make this value negative, since a loan represents money owed, and is a cash outflow. Putting it all together, Excel evaluates the formula like this: =PMT(C5/12,C6*12,-C9) To get the number of periods ( nper), we multiply the term in years (30) by the periods per term (12). To get the rate (which is the period rate), we divide the annual rate (7%) by the compounding periods per year (12). The arguments are provided to PMT as follows:īecause mortgage rates are annual, and terms are stated in years, the arguments for the rate and periods are carefully set up to normalize inputs to monthly periods. ![]() In the example shown, the formula in cell C11 is: =PMT(C5/12,C6*12,-C9) You can use the PMT function to calculate the payment for a mortgage by providing the interest rate, the term, and the loan amount. Defaults to 0.Īlthough the PMT function takes five arguments total, we only need the first three arguments ( rate, nper, and pv) to estimate the mortgage payment in this example.
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