How To Calculate Loan Term Based On Monthly Payment In Excel 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
The payment returned by PMT includes principal and interest but no taxes reserve payments or fees sometimes associated with loans 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 an annual interest rate of 12 percent use 12 12 for rate and 4 12 for nper Calculating Monthly Car Payments in Excel Calculating a monthly car payment in Excel is similar to calculating a monthly mortgage payment To start you ll need the interest rate length of loan and the amount borrowed For this example let s say the car loan is for 32 000 over five years at a 3 9 interest rate Interest rate 3 9
How To Calculate Loan Term Based On Monthly Payment In Excel
How To Calculate Loan Term Based On Monthly Payment In Excel
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But to use the PMT function to calculate the constant loan payment it refers to monthly payment So I re construct the PMT function and find out it is very helpful for me to use as follows PMT annual rate 12 annual term 12 pv fv type In this article we will demonstrate how to Apply a direct formula to calculate monthly payment Use the PMT function to calculate monthly payment Use the PMT function with a compound period to calculate monthly payment Use the Formulas tab to calculate monthly payment Calculate monthly payments on a loan including a mortgage loan payment a credit card loan payment a down payment
Thankfully Excel has made it easy for you to calculate loan payments for any type of loan or credit card Excel has a built in function PMT that calculates the monthly loan payments for you All you have to do is enter the details of the loan like the interest rate the duration and the principal of the loan and Excel will calculate the Example 1 Calculating the Monthly Loan Amount in a House Mortgage Suppose you have a house loan of 200 000 that needs to be paid back in 20 years when the payment is made every month and the interest rate is 4 Here are details regarding the arguments rate 4 12 since this the payment is monthly you need to use the monthly rate
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In this example we have a dataset in cells B2 C6 representing a loan calculation scenario including the loan amount interest rate number of payment periods and compounding periods per year The goal is to write a formula to calculate the monthly loan payment using the Excel PMT function Formula PMT C3 12 C4 C2 C Adjusting calculations for different loan terms When using Excel to calculate the loan amount based on the monthly payment keep in mind that different loan terms can produce varying results A longer loan term may result in a higher calculated loan amount while a shorter loan term may yield a lower figure
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How To Calculate Loan Term Based On Monthly Payment In Excel - [desc-14]