ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Calculating loan repayments in Excel

Updated on August 7, 2010

The payment or PMT function in Excel can be used to calculate loan repayments. This can be very useful in both personal and business life.

All you need to do is feed in the necessary details such as the interest rate, length of the loan period and the amount of the loan into your Excel cells and the PMT function will do the rest.

The information the function requires and how it should be entered is shown below.

PMT function syntax
PMT function syntax

The square brackets around the FV and Type arguments indicate that they are optional. 0 is entered in each if they are omitted.

In the worksheet below the interest rate, number of periods and amount of the loan has been entered. We shall enter a PMT function in cell D4 to calculate the monthly payments for such a loan.

Loan information in worksheet
Loan information in worksheet

Books from Amazon

In cell D4 enter;

=PMT (C4/12, B4*12, A4)

  • In C4/12 the annual interest rate was divided by 12 to calculate the monthly interest rate. If the loan payments were weekly we would enter C4/52, and if quarterly we would enter C4/4 and so on
  • In B4*12 the number of payment periods was multiplied by 12. This was because the number of periods was entered in years, but the payments are monthly. This now calculates the number of monthly payment periods
  • A4 enters the loan amount into the function
  • The FV argument was omitted so Excel assumes 0 for the value. This means after all the payments are made the remaining total should be 0. The loan is completely paid off
  • The Type argument was also omitted so Excel again assumes 0 for the value. This means the payments are made at the end of each month

The resulting loan repayments are £1,162.95.

The worksheet below shows the completed function. Additional formulas have been added to cells E4 and F4 to calculate the total payment including interest, and the interest paid on the loan.

The formula in cell E4 is = D4*12*B4

The formula in cell F4 is = E4-A4

Loan payments calculated using the PMT function
Loan payments calculated using the PMT function

Useful Excel Links

Calculate future savings using Goal Seek

Learn how to calculate future values such as a savings amount using Excel's FV function and Goal Seek tool.

Excel functions

This page is dedicated to listing the most useful Microsoft Excel functions. Explanations on how to write each function and examples of its use are provided.

Software training videos

Online training videos for Excel, Word, PowerPoint, Photoshop, Dreamweaver, Flash, JavaScript and much much more..

Excel Formulas Ebook

Make formulas easy with this Excel formulas ebook and never fear them again.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)