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how to calculate monthly payment formula in excel. Payment per Period. Type - optional When payments.
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The equation used to calculate your payment payment is the future value function. To calculate the monthly payment with PMT you must provide an interest rate the number of periods and a present value which is the loan amount. PMT function is an advanced excel formula and one of the financial functions used to calculate the monthly payment amount against the simple loan amount.
Doing so will calculate the amount that youll have to pay in interest for each period.
For rate divide the annual interest rate by the number of payments per year which is deemed to be equal to the number of compounding periods. To calculate monthly interest rate the formula in C6 is. Add up the total interest paid over the life of the loan in cell E5 by entering the following formula without quotation marks. Save the workbook file with an appropriate and descriptive name.
