From the course: Cert Prep: Excel 2016 Microsoft Office Expert (77-728)

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Use the PMT financial function

Use the PMT financial function

From the course: Cert Prep: Excel 2016 Microsoft Office Expert (77-728)

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Use the PMT financial function

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- [Instructor] In this video, we'll learn how to use excel as a payment calculator by utilizing the payment function or PMT. For the payment function, there are five pieces of information that we need to have. First, the interest rate and if the interest rate is an annual rate, we'll divide that by 12. Second, the number of payments and sometimes this is given to us in years and sometimes its given to us in months. If we do get the information in years, we'll need to be sure and multiple that times 12 to find out how many months we will be making payments. The present value. This is the amount of the loan or the mortgage which we are financing and in this case, its an automobile loan so we'll have the price of the car minus our down payment, plus the state sales tax to be financed. Fv is optional. Its the future value and when we take out a loan, we always intend to pay it all the way down so that's usually zero and that's what I enter. The last piece is the type and this is also…

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