The Pmt function returns the periodic payment for an investment.
You can use it to calculate constant payments for an investment or a loan, based on the loan amount, number of periods, and constant interest rate.
Pmt is part of the set of financial functions that Sigma supports.
Pmt(rate, nperiods, pv, [fv], [type])
The Pmt function has the following arguments:
- The interest rate for the loan.
- The total number of payments for the loan.
- The present value, or total value of all loan payments; the amount borrowed.
- The future value, or a cash balance you want after the last payment is made.
- Defaults to 0 (zero).
- When payments are due:
- End of period
- Beginning of period
- Default is 0.
- Be consistent with the units for rate and nperiods arguments. If you make monthly payments on a two-year loan at an annual interest rate of 7%, use the rate calculation of 0.07/12 and nperiods calculation of 2*12. For annual payments on the same loan, use the rate of 0.07 and nperiods of 2.
- Pmt returns the payment calculation that includes both the principal and interest portions. It does not include taxes, reserve payments, or fees.
- To calculate the total amount paid over the duration of the loan, multiply the returned Pmt value by nperiods.
The monthly payment for a two-year loan of $10,000, with an annual interest rate of 7% is $447.73.
The annual payment for a two-year loan of $10,000, with an annual interest rate of 7% is $5,530.92.
The yearly payment for a loan of $100,000, with an annual interest rate of 10% over 30 years, compounded yearly, is $10,607.92. Same conditions at half the time (15 years) result in a yearly payment of $13,147.38.