---
title: "PMT function in Excel"  
description: "PMT function in Excel"  
author: "AVADHESH PATEL"  
published: 2013-03-29  
updated: 2019-09-07  
canonical: https://www.mindstick.com/articles/1176/pmt-function-in-excel  
category: "excel"  
tags: ["excel"]  
reading_time: 2 minutes  

---

# PMT function in Excel

The PMT (Payment) [function](https://www.mindstick.com/articles/43970/purchase-suitable-wedding-dresses-for-your-wedding-function), one of Excel's [financial](https://answers.mindstick.com/qa/41937/what-was-hamilton-s-financial-program) [functions](https://www.mindstick.com/forum/34086/jquery-callback-functions), can be used to calculate the [payments](https://www.mindstick.com/news/2458/elon-musk-claims-that-twitter-will-introduce-encrypted-direct-messages-and-payments) for a loan or the future value of an investment. In other words for calculating the payment for a loan based on [constant](https://www.mindstick.com/forum/34714/difference-between-statics-vs-constant-in-c-sharp) payments and a constant [interest rate](https://answers.mindstick.com/qa/38471/what-is-the-new-interest-rate-approved-by-the-union-government-on-the-employee-provident-fund-epf-for-the-year-2015-16) PMT function used.\

##### Syntax

##### PMT(rate,nper,pv,fv,type)

**Rate** is the interest rate for the loan.

**Nper** is the total number of payments for the loan.

**Pv** is the present value, or the total amount that a series of future payments is worth now; also [known as](https://answers.mindstick.com/qa/38482/name-the-world-s-lightest-material-which-was-manufactured-by-isro-scientists-at-the-vikram-sarabhai-space-centre-thiruvananthapuram-and-is-also-known-as-blue-air) the principal.

**Fv** is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.

**Type** is the number 0 (zero) or 1 and indicates when payments are due.

##### Steps are given below

Step 1: First create one [excel sheet](https://www.mindstick.com/forum/23040/to-import-excel-sheet-into-sql-database) as below

![PMT function in Excel](https://www.mindstick.com/mindstickarticle/121aa14e-1650-4dd3-8bc5-c50312b2aeda/images/beb346a3-00aa-43bb-8623-d0bcc3dd0f6b.png)

Step 2: Now apply PMT formula as below

![PMT function in Excel](https://www.mindstick.com/mindstickarticle/121aa14e-1650-4dd3-8bc5-c50312b2aeda/images/d786fe1c-1e48-446d-8c77-125e548349bd.png)

##### Note:

If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12 percent for rate and 4 for nper.

Step 3: Now press enter button and calculate [amount of loan](https://answers.mindstick.com/qa/34757/india-and-signed-how-much-amount-of-loan-with-asian-development-bank-adb-for-improvement-and-expansion-of-water-supply-in-bihar) payment.

![PMT function in Excel](https://www.mindstick.com/mindstickarticle/121aa14e-1650-4dd3-8bc5-c50312b2aeda/images/857c3274-ea8b-4fba-a00a-e105a4f2a6cd.png)

---

Original Source: https://www.mindstick.com/articles/1176/pmt-function-in-excel

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