PMT and What if analysis. PMT  The Microsoft Excel PMT function returns the payment amount for a loan based on an interest rate and a constant payment.

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Presentation transcript:

PMT and What if analysis

PMT  The Microsoft Excel PMT function returns the payment amount for a loan based on an interest rate and a constant payment schedule.  The syntax for the Microsoft Excel PMT function is: PMT( interest_rate, number_payments, PV, [FV], [Type] )

Conti…..  interest_rate = Rate, divided by 12(number of months).  number_payments = NPER, multiply it with 12.  PV = Loan Amount = total amount.

Calculating a Loan Payment  The functions to work with loans are the same ones you used to work with investments New Perspectives on Microsoft Office Excel

Working with What-If Analysis and Goal Seek To perform what-if analysis:  Change the value of a worksheet cell (the input cell)  Observe its impact on one or more calculated cells (the result cells) To perform Goal Seek:  In the Data Tools group on the Data tab, click the What-If Analysis button, and then click Goal Seek  In the Set cell box, select the result cell, and then, in the To value box, specify its value (goal)  In the By changing cell box, specify the input cell  Click the OK button. The value of the input cell changes to set the value of the result cell