In this tutorial you will learn that how to use financial function in excel. You can calculate loan payments by using the PMT function. Syntax of PMT function is as following.

PMT(rate, nper, pv, fv, type) where rate is interest rate, nper is number of payments for loan, pv is present value, fv is future value and is optional, type be 0 or 1 represent the payment due status and it is optional.

Write PMT function in cell as following.

=PMT(rate, nper, pv)

use financial function in excel example:-

For this example need a spread sheet in excel like as following.

financial-spread-sheet

Interest rate of loan is 10% per year. So Calculated as 10/100 so sheet become as following. Loan for two year pay back so no of payments 12*2.

use financial function in excel

Present value is value of loan amount so then the sheet become like as following.

loan-spread-sheet

Now for calculating monthly amount write PMT function with parameters.

formula-apply

After writing formula press enter key and formula applied. So sheet become like as following.

formula-result

Now copy function to the other cells by the drag down mouse cursor so sheet like as following.

pmt-function-copied

So amount of loan that pay back is calculated and load sheet is completed.

 

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