From the course: Google Sheets: Advanced Formulas and Functions

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Determine loan payments

Determine loan payments - Google Sheets Tutorial

From the course: Google Sheets: Advanced Formulas and Functions

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Determine loan payments

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- [Instructor] Most loans, whether between businesses or made by businesses to individual borrowers, are fully amortized. Fully amortized means that the monthly payments made over the term of the loan pay off the principal and all accrued interest. In Sheets, you can calculate the monthly payments required to pay off a fully amortized loan using the PMT function. I have all the information that I need to calculate my monthly payment. I have the interest rate which is an annual rate, and the number of periods which is 96. In this case we have 12 periods per year making monthly payments. Multiply eight by 12 to get 96 so we have an eight year loan. This is a business loan. The present value is $7.32 million. The future value is zero, meaning we're paying it all the way down. And type refers to when the payment is made whether at the beginning of the month or at the end of the month. Zero is the default and it refers to the end of the month so we'll leave it there. To calculate the…

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