This article describes the formula syntax and usage of the PMT function (function: A prewritten formula that takes a value or values, performs an operation, and returns a value or values. Use functions to simplify and shorten formulas on a worksheet, especially those that perform lengthy or complex calculations.) in Microsoft Excel.
Let the Excel Formula Coach walk you through using PMT to figure out a monthly payment.
Calculates the payment for a loan based on constant payments and a constant interest rate.
PMT(rate, nper, pv, [fv], [type])
Note For a more complete description of the arguments in PMT, see the PV function.
The PMT function syntax has the following arguments (argument: A value that provides information to an action, an event, a method, a property, a function, or a procedure.):
- Rate Required. The interest rate for the loan.
- Nper Required. The total number of payments for the loan.
- Pv Required. The present value, or the total amount that a series of future payments is worth now; also known as the principal.
- Fv Optional. The future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.
- Type Optional. The number 0 (zero) or 1 and indicates when payments are due.
|Set type equal to
||If payments are due
|0 or omitted
||At the end of the period
||At the beginning of the period
- The payment returned by PMT includes principal and interest but no taxes, reserve payments, or fees sometimes associated with loans.
- Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12 percent for rate and 4 for nper.
Tip To find the total amount paid over the duration of the loan, multiply the returned PMT value by nper.
The workbook below shows examples of this function. Inspect them, change existing formulas, or enter your own formulas to learn how the function works.
To work more in-depth with the example data in Excel, download the embedded workbook to your computer, and then open it in Excel.