PPMT Function Explained
The PPMT Function in Microsoft Excel calculates the payment on a loan for a given period, based on an interest rate and a constant payment schedule. It takes four arguments: rate, per, nper, and pv. The rate argument is the interest rate per period, per is the period for which the payment is calculated, nper is the total number of payments, and pv is the present value of the loan. The function returns the payment amount for the given period.
PPMT Function Syntax
PPMT(rate, period, number_of_periods, present_value, [future_value], [type])
- rate: The interest rate for the loan.
- period: The period for which you want to find the payment. Period must be in the range 1 to number_of_periods.
- number_of_periods: The number of payments for the loan.
- present_value: The present value, or the total amount that a series of future payments is worth now.
- future_value: [optional] The future value, or a cash balance you want to attain after the last payment is made. If omitted, 0 is assumed.
- type: [optional] The number 0 or 1 and indicates when payments are due. 0 or omitted = end of the period, 1 = beginning of period.