Determining Monthly Payments
Problem
You're borrowing money and want to figure out what your monthly payments will be, given the principal amount and interest rate.
Solution
Use the PMT function.
Discussion
Let's say you're borrowing $25,000 and the term of the loan is five years. Payments are due at the end of each month and the annual interest rate is 3.9%. What are your required monthly payments?
PMT can figure this out for you. The syntax for PMT is =PMT(rate, nper, pv, fv, type), where rate is the interest rate per period, nper is the number of payment periods, pmt is the payment per period, pv is the present value, fv is the future value, and type is an indicator of the payment type (0 for payments at the end of each pay period or 1 for payments at the beginning of each pay period).
For this example, the formula =PMT(0.039/12, 12*5, 25000, 0, 0) returns -$459.29, which means you'd have to pay $459.29 per month to cover principal and interest.
See Also
Excel includes a loan amortization template that's very handy when investigating loan options. Select File images/U2192.jpg border=0> New ... from the main menu bar to open the New Workbook Task Pane on the right side of the window. Under Templates, select "On My Computer ..." to open the Templates dialog box. Select the Loan Amortization template and press OK to open the template. Enter your loan parameters and the template will automatically compute monthly payments, along with principal and interest summaries over the term of the loan.
Using Excel
- Introduction
- Navigating the Interface
- Entering Data
- Setting Cell Data Types
- Selecting More Than a Single Cell
- Entering Formulas
- Exploring the R1C1 Cell Reference Style
- Referring to More Than a Single Cell
- Understanding Operator Precedence
- Using Exponents in Formulas
- Exploring Functions
- Formatting Your Spreadsheets
- Defining Custom Format Styles
- Leveraging Copy, Cut, Paste, and Paste Special
- Using Cell Names (Like Programming Variables)
- Validating Data
- Taking Advantage of Macros
- Adding Comments and Equation Notes
- Getting Help
Getting Acquainted with Visual Basic for Applications
- Introduction
- Navigating the VBA Editor
- Writing Functions and Subroutines
- Working with Data Types
- Defining Variables
- Defining Constants
- Using Arrays
- Commenting Code
- Spanning Long Statements over Multiple Lines
- Using Conditional Statements
- Using Loops
- Debugging VBA Code
- Exploring VBAs Built-in Functions
- Exploring Excel Objects
- Creating Your Own Objects in VBA
- VBA Help
Collecting and Cleaning Up Data
- Introduction
- Importing Data from Text Files
- Importing Data from Delimited Text Files
- Importing Data Using Drag-and-Drop
- Importing Data from Access Databases
- Importing Data from Web Pages
- Parsing Data
- Removing Weird Characters from Imported Text
- Converting Units
- Sorting Data
- Filtering Data
- Looking Up Values in Tables
- Retrieving Data from XML Files
Charting
- Introduction
- Creating Simple Charts
- Exploring Chart Styles
- Formatting Charts
- Customizing Chart Axes
- Setting Log or Semilog Scales
- Using Multiple Axes
- Changing the Type of an Existing Chart
- Combining Chart Types
- Building 3D Surface Plots
- Preparing Contour Plots
- Annotating Charts
- Saving Custom Chart Types
- Copying Charts to Word
- Recipe 4-14. Displaying Error Bars
Statistical Analysis
- Introduction
- Computing Summary Statistics
- Plotting Frequency Distributions
- Calculating Confidence Intervals
- Correlating Data
- Ranking and Percentiles
- Performing Statistical Tests
- Conducting ANOVA
- Generating Random Numbers
- Sampling Data
Time Series Analysis
- Introduction
- Plotting Time Series Data
- Adding Trendlines
- Computing Moving Averages
- Smoothing Data Using Weighted Averages
- Centering Data
- Detrending a Time Series
- Estimating Seasonal Indices
- Deseasonalization of a Time Series
- Forecasting
- Applying Discrete Fourier Transforms
Mathematical Functions
- Introduction
- Using Summation Functions
- Delving into Division
- Mastering Multiplication
- Exploring Exponential and Logarithmic Functions
- Using Trigonometry Functions
- Seeing Signs
- Getting to the Root of Things
- Rounding and Truncating Numbers
- Converting Between Number Systems
- Manipulating Matrices
- Building Support for Vectors
- Using Spreadsheet Functions in VBA Code
- Dealing with Complex Numbers
Curve Fitting and Regression
- Introduction
- Performing Linear Curve Fitting Using Excel Charts
- Constructing Your Own Linear Fit Using Spreadsheet Functions
- Using a Single Spreadsheet Function for Linear Curve Fitting
- Performing Multiple Linear Regression
- Generating Nonlinear Curve Fits Using Excel Charts
- Fitting Nonlinear Curves Using Solver
- Assessing Goodness of Fit
- Computing Confidence Intervals
Solving Equations
- Introduction
- Finding Roots Graphically
- Solving Nonlinear Equations Iteratively
- Automating Tedious Problems with VBA
- Solving Linear Systems
- Tackling Nonlinear Systems of Equations
- Using Classical Methods for Solving Equations
Numerical Integration and Differentiation
- Introduction
- Integrating a Definite Integral
- Implementing the Trapezoidal Rule in VBA
- Computing the Center of an Area Using Numerical Integration
- Calculating the Second Moment of an Area
- Dealing with Double Integrals
- Numerical Differentiation
Solving Ordinary Differential Equations
- Introduction
- Solving First-Order Initial Value Problems
- Applying the Runge-Kutta Method to Second-Order Initial Value Problems
- Tackling Coupled Equations
- Shooting Boundary Value Problems
Solving Partial Differential Equations
- Introduction
- Leveraging Excel to Directly Solve Finite Difference Equations
- Recruiting Solver to Iteratively Solve Finite Difference Equations
- Solving Initial Value Problems
- Using Excel to Help Solve Problems Formulated Using the Finite Element Method
Performing Optimization Analyses in Excel
- Introduction
- Using Excel for Traditional Linear Programming
- Exploring Resource Allocation Optimization Problems
- Getting More Realistic Results with Integer Constraints
- Tackling Troublesome Problems
- Optimizing Engineering Design Problems
- Understanding Solver Reports
- Programming a Genetic Algorithm for Optimization
Introduction to Financial Calculations
- Introduction
- Computing Present Value
- Calculating Future Value
- Figuring Out Required Rate of Return
- Doubling Your Money
- Determining Monthly Payments
- Considering Cash Flow Alternatives
- Achieving a Certain Future Value
- Assessing Net Present Worth
- Estimating Rate of Return
- Solving Inverse Problems
- Figuring a Break-Even Point
Index
EAN: 2147483647
Pages: 206
