Finance
Work out a monthly loan payment
=PMT(B1/12,B2*12,-B3)How it works in Excel
- B1/12 turns the yearly interest rate into a monthly rate.
- B2*12 turns the years into months.
- -B3 is the loan amount. The minus sign makes the answer positive.
- The rate and the number of payments must use the same period, here months.
- The result covers interest and the loan amount, but not taxes or insurance.
- Excel treats money coming in and going out as opposite signs.
The idea in general
It finds the one fixed payment that clears the loan and its interest by the end of the term.
What I assumed
- The yearly rate is in B1, the years are in B2 and the loan amount is in B3.
Check the result on your own data before relying on it.