IPMT function

Returns the interest payment for a given period for an investment based on periodic, constant payments and a constant interest rate. For a more complete description of the arguments in IPMT and for more information about annuity functions, see the PV function.

Syntax

IPMT(rate,per,nper,pv,fv,type)

Rate     is the interest rate per period.

Per     is the period for which you want to find the interest and must be in the range 1 to nper.

Nper     is the total number of payment periods in an annuity.

Pv     is the present value, or the lump-sum amount that a series of future payments is worth right now.

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 (the future value of a loan, for example, is 0).

Type     is the number 0 or 1 and indicates when payments are due. If type is omitted, it is assumed to be 0.

Set type to

If payments are due

0

At the end of the period

1

At the beginning of the period

Remarks

• Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12% for rate and 4 for nper.

• For all the arguments, cash you pay out, such as deposits to savings, is represented by negative numbers; cash you receive, such as dividend checks, is represented by positive numbers.

Examples

In the first example, the interest rate is divided by 12 to get a monthly rate. The years the money is paid out is multiplied by 12 to get the number of payments.

Rate

Period

Nper

PV

Formula

Description (Result)

10%

1

3

8000

=IPMT([Rate]/12, [Period], [Nper], [PV])

Interest due in the first month for a loan with the specified arguments (-22.41)

10%

1

3

8000

=IPMT([Rate], 3, Nper, [PV])

Interest due in the last year for a loan with the specified arguments, where payments are made yearly (-292.45)

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