The PPMT function calculates the payments required to fully pay off a loan or investment over a set number of periods. In Google Sheets, you can use the PPMT function to calculate the monthly payments for a loan, the annual payments for an investment, or the total payments for a loan or investment. To use the PPMT function, you will need to know the loan amount, the interest rate, the number of payments, and the payment frequency.
The syntax for the PPMT function in Google Sheets is:
rate is the annual interest or loan rate nper is the number of payments over the life of the loan pmt is the payment amount pv is the present value fv is the future value type is 0 for payments at the end of the period, and 1 for payments at the beginning of the period.
The Excel function PMT() calculates the periodic payment for a loan. The syntax for the function is: PMT(rate, nper, pv, type). The rate is the interest rate per period, nper is the number of periods, pv is the present value, and type is 0 for installment payments and 1 for annuity payments.
To calculate the monthly payment for a $10,000 loan with a 5% interest rate, you would use the function: PMT(5/12, 120, 10000, 0). This function would return a monthly payment of $83.33.
PPMT should not be used when there is more than one payment per month, when the first payment is not the first month of the loan, when the payments are not evenly spaced, when the payments are not monthly, or when the interest rate is not fixed.
PPMT is the formula for calculating payments on a loan or annuity in arrears. In Google Sheets, there are similar formulae for calculating payments on a loan or annuity in arrears. The PMT function calculates the periodic payment for an annuity. The PPMT function calculates the payment for a loan that is paid in arrears. The IPMT function calculates the interest payment for an annuity. The IPMT function calculates the interest payment for a loan that is paid in arrears.