When you pay back a loan, each payment has a principal component and an interest component. Payments early in the loan’s life consist mostly of paying down the interest, while payments late in the loan’s life are almost entirely principal. You can determine the cumulative interest and principal you’ve paid on a loan by using the CUMIPMT and CUMPRINC functions.
- [Narrator] When you pay back a loan,…each payment has a principal component…and an interest component.…Payments early in the loan's life…consist mostly of paying down the interest,…while payments late in the loan's life…are almost entirely principal.…You can determine the cumulative interest…and principal you've paid on a loan…by using the cumipmt and cumprinc functions.…I'll demonstrate how to use these functions and formulas.…My sample file is the Cumumlative_01_03 workbook…which you can find in the Chapter01 folder…of your Exercise Files collection.…
To calculate the cumulative principal or interest…that you have paid on a loan during a specific period,…you need to know several things.…The first is the interest rate your bank is charging you.…That's in cell C3.…In C4 is the number of periods of the entire loan.…And Excel needs that so it can calculate…individual payments.…Next is the present value.…That is the amount that you're borrowing.…The next two arguments are the starting period…and the ending period.…
Author
Curt Frye
Released
10/9/2016Lynda.com is a PMI Registered Education Provider. This course qualifies for professional development units (PDUs). To view the activity and PDU details for this course, click here.
The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
- Analyzing simulation results
Skill Level Intermediate
Duration
Views
-
Introduction
-
Welcome58s
-
-
1. Analyzing Loans, Payments, and Interest
-
2. Calculating Depreciation
-
3. Determining Values and Rates of Return
-
4. Calculating Bond Coupon Dates and Security Durations
-
5. Calculating Security Prices and Yields
-
6. Analyzing Simulation Results
-
Conclusion
-
Next steps1m 12s
-
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.
Share this video
Embed this video
Video: Calculating cumulative principal and interest paid between periods (CUMPRINC and CUMIPMT)