PMT function is used to calculate the periodic payment for a loan, for example, for a loan of $800,000 with the payment period of 36 months (3 years) and interest rate of 16%, the PMT function calculates the monthly payment of $28,150.
PMT(rate, nper, pv, [fv], [type])
Rate – The annual rate of interest.
Nper – The total number of payment for a loan.
Pv – The present value
[fv] – The optional argument is the future value that you may want to attain after loan final payment. If omitted, Excel will treat it as zero.
[type] – The optional argument used to specify when a payment is 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|