Question:
State the parameters of Excel’s PMT function. What is the use of this function?
State the parameters of Excel’s PMT function. What is the use of this function?
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Use the PMT function to plan loan repayments effectively, as it accounts for interest rates, payment periods, and loan amounts. It’s especially useful for financial planning and budgeting.
Updated On: Jan 18, 2025
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Solution and Explanation
The PMT function in Excel is used to calculate the periodic payment for a loan based on constant payments and a constant interest rate. Its parameters are:
Rate: The interest rate for the loan per period.
Nper: The total number of payment periods.
Pv: The present value or the principal amount of the loan.
Fv (optional): The future value, or the desired balance after the last payment (default is 0).
Type (optional): The timing of payments:
0: Payment at the end of the period (default).
1: Payment at the beginning of the period.
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