How To Calculate Interest Paid On A Loan In Excel You can use the CUMIPMT function in Excel to calculate the total interest that will be paid on a loan This function uses the following syntax CUMIPMT rate nper pv start period end period type where rate The annual interest rate nper The total number of payment periods pv The present value i e starting value of the loan start period The first period in the calculation
Calculate total interest paid on a loan in Excel For example you have borrowed 100000 from bank in total the annual loan interest rate is 5 20 and you will pay the bank every month in the coming 3 years as below screenshot shown Loan Amount 5 000 000 00 The loan amount It must be entered as a negative value Yearly Rate 10 10 interest rate should be paid annually Period per Year 12 There are 12 months in a year Period 1 To get the result for the first month the input is 1 This value is variable Total Period year 25 The number of years allowed to pay off the total loan amount
How To Calculate Interest Paid On A Loan In Excel
How To Calculate Interest Paid On A Loan In Excel
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Formula Breakdown The RATE function will return the monthly rate in percentage of Loan Payment C7 denotes the NPER as the total payment period in years which is 5 We have multiplied it by 12 for the monthly payment system C6 denotes the payment made in each period as PMT The Minus sign denotes the monthly payment as debit C5 denotes the Loan as present value PV Calculate a Loan Payment in Excel For many people affording a new car involves knowing what the monthly payment will be To find out in Excel you simply need the basic loan information and a handy function Related 7 Formula to Calculate an Interest Rate in Excel Maybe you have an existing loan and want to quickly see the annual interest
For example you can build a calculator to calculate the total interest paid on a loan based on the loan amount interest rate and period of payment In Excel there are 2 ways of doing this CUMIPMT function this returns the cumulative interest between a start and end period Syntax CUMIPMT rate nper pv start period end period type Where Rate required the constant interest rate per period You can supply it as a percentage or decimal number For example if you make annual payments on a loan with an annual interest rate of 6 percent use 6 or 0 06 for rate If you make weekly monthly or quarterly payments divide the annual rate by the number of payment periods per year as shown in this example
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In this Excel tutorial we ll provide a brief overview of the simple steps involved in using Excel to calculate the total interest paid on a loan empowering you to take control of your financial well being Key Takeaways Calculating total interest paid on a loan is crucial for financial planning and decision making Doing so will calculate the amount that you ll have to pay in interest for each period This doesn t give you the compounded interest which generally gets lower as the amount you pay decreases You can see the compounded interest by subtracting a period s worth of payment from the principal and then recalculating cell B4
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How To Calculate Interest Paid On A Loan In Excel - For example you can build a calculator to calculate the total interest paid on a loan based on the loan amount interest rate and period of payment In Excel there are 2 ways of doing this CUMIPMT function this returns the cumulative interest between a start and end period Syntax CUMIPMT rate nper pv start period end period type