PMT Function Explained
The PMT function in Microsoft Excel calculates the periodic payment for a loan based on constant payments and a constant interest rate. It takes three arguments: rate (the interest rate per period), nper (the total number of payment periods in an annuity), and pv (the present value, or the total amount that a series of future payments is worth now). The PMT function returns the amount of the payment for each period.
PMT Function Syntax
PMT(rate, nper, pv, [fv], [type])
- rate: The interest rate for the loan.
- nper: The total number of payments for the loan.
- pv: The present value, or the total amount that a series of future payments is worth now.
- fv: (Optional) The future value, or a cash balance you want to attain after the last payment is made. If omitted, it is assumed to be 0 (the future value of a loan, for example, is 0).
- type: (Optional) A number 0 or 1 and indicates when payments are due. 0 or omitted = end of the period, 1 = beginning of period.