💸 The Loan Crusher

Goal: Calculate the monthly payment.
PMT takes a large Loan (PV), applies Interest (Rate), and spreads it over Time (Nper).

RATE %
💰
$0
-
Rate/Year
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Years
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Total Months
Ready...

💻 Formula Structure

=PMT(rate, nper, pv, [fv], [type])
  • 1. Rate: Interest rate per period. (Divide Annual by 12!)
  • 2. Nper: Total number of payments. (Multiply Years by 12!)
  • 3. Pv: Present Value (Loan Amount).
-- Calculate Monthly Payment
=PMT( 5%/12, 5*12, 20000 )
Monthly Payment:
-

⚠️ Common Pitfalls

🚫 Forgetting to Divide by 12
The Rate is usually annual (e.g., 5%). You pay monthly. You MUST use 5%/12 or your payment will be huge.
🚫 Negative Result
Excel returns a negative number because it represents money leaving your pocket. To see it as positive, put a minus sign before the PV: -PV.