﻿ PPMT function

# PPMT function

This article describes the formula syntax and usage of the PPMTfunction in Microsoft Excel.

## Description

Returns the payment on the principal for a given period for an investment based on periodic, constant payments and a constant interest rate.

## Syntax

PPMT(rate, per, nper, pv, [fv], [type])

Note   For a more complete description of the arguments in PPMT, see PV.

The PPMT function syntax has the following arguments:

• Rate    Required. The interest rate per period.

• Per    Required. Specifies the period and must be in the range 1 to nper.

• Nper    Required. The total number of payment periods in an annuity.

• Pv    Required. The present value — the total amount that a series of future payments is worth now.

• Fv    Optional. 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    Optional. The number 0 or 1 and indicates when payments are due.

 Set type equal to If payments are due 0 or omitted 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.

## Examples

### Example 1

The example may be easier to understand if you copy it to a blank worksheet.

How do I copy an example?

1. Select the example in this article.

Important   Do not select the row or column headers.

Selecting an example from Help

2. Press CTRL+C.

3. In Excel, create a blank workbook or worksheet.

4. In the worksheet, select cell A1, and press CTRL+V.

Important   For the example to work properly, you must paste it into cell A1 of the worksheet.

5. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

After you copy the example to a blank worksheet, you can adapt it to suit your needs.

 1 2 3 4 5 6
 A B Data Description 10% Annual interest rate 2 Number of years in the loan 2000 Amount of loan Formula Description (Result) =PPMT(A2/12, 1, A3*12, A4) Payment on principle for the first month of loan (-75.62)

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

### Example 2

The example may be easier to understand if you copy it to a blank worksheet.

How do I copy an example?

1. Select the example in this article.

Important   Do not select the row or column headers.

Selecting an example from Help

2. Press CTRL+C.

3. In Excel, create a blank workbook or worksheet.

4. In the worksheet, select cell A1, and press CTRL+V.

Important   For the example to work properly, you must paste it into cell A1 of the worksheet.

5. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

After you copy the example to a blank worksheet, you can adapt it to suit your needs.

 1 2 3 4 5 6
 A B Data Description 8% Annual interest rate 10 Number of years in the loan 200,000 Amount of loan Formula Description (Result) =PPMT(A2, A3, 10, A4) Principal payment for the last year of the loan with the above terms (-27,598.05)

Applies To: Excel 2010, Excel Starter, Excel Online, SharePoint Online

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