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PMT

PMT. Payment Function. What is an installment loan?. An installment loan is a loan that is re-paid over time with a set number of scheduled payments. What is the purpose of the PMT function?.

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PMT

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  1. PMT Payment Function

  2. What is an installment loan? An installment loan is a loan that is re-paid over time with a set number of scheduled payments. What is the purpose of the PMT function? The PMT function allows you to determine the monthly payment of an installment loan based on the interest rate and the number of payments you want to make. PMT Parts and Layout Interest Rate, # of Payments, Principal (amount being borrowed) =PMT(Interest Rates/12, # of payments, -Principal)

  3. How do you calculate the total amount to be paid on an installment loan? You multiply the monthly payment by the total number of payments. How do you calculate the total interest to be paid on an installment loan? You subtract the principal (amount borrowed) from the total amount to be paid on the installment loan (principal + interest).

  4. PMT Set-up in a spreadsheet =pmt(b2/12, b3, -b4) =b6*b3 =b8 – b4

  5. PMT Set-up in a spreadsheet =pmt(8%/12, 60, - $20,000) =$405.53 * 60 =$24, 331.67 – $20,000

  6. PMT Set-up in a spreadsheet $405.53 $24,331.67 $4,331.67

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