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PMT

The PMT function in Google Sheets is a powerful tool to calculate the periodic payment for an annuity investment based on constant-amount periodic payments and a constant interest rate. Whether you're planning your budget, analyzing loan payments, or making investment decisions, the PMT function simplifies the calculations. Dive into our comprehensive guide to master its application.

Function Syntax and Parameters

Syntax: PMT(rate, number_of_periods, present_value, [future_value], [end_or_beginning])

Parameters:

  • rate: The interest rate per period.
  • number_of_periods: The total number of payment periods.
  • present_value: The present value or principal of the annuity.
  • future_value [Optional]: The future value remaining after the last payment. (Default is 0)
  • end_or_beginning [Optional]: Indicates whether the payments are due at the end or the beginning of each period. (Default is 0)

Step-by-Step Tutorial

  1. Calculating periodic payment:

    • Example: =PMT(0.05, 12, 1000)
    • Result: -110.64

  2. Including future value:

    • Example: =PMT(0.1, 10, 1000, 5000)
    • Result: -497.18

Use Cases and Scenarios

  1. Loan Payments: Determine the regular payments for a loan with a fixed interest rate.
  2. Investment Planning: Calculate the periodic contributions required to reach a specific investment goal.
  3. Mortgage Analysis: Analyze the mortgage payments over the duration of a loan.

Related Functions

  • RATE: Find the interest rate per period for an annuity.
  • NPER: Calculate the total number of payment periods for an annuity.
  • PV: Determine the present value or principal of an annuity.

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