What is the PMT function in Excel?
Just like the name suggests – PMT stands for payments 💸
The PMT function of Excel calculates the payments of a loan based on an interest rate, loan amount, and the number of periods.
For example, if you take an auto loan of $50,000 at an annual interest rate of 10%, and you have 4 years to repay – how much amount will you repay annually?
The PMT function will tell you that:
That’s an annual installment of $15,773. How did we calculate it? We will learn that only in the next section🚴♀️