Excel like a finance pro.
The functions, VBA, and shortcuts a finance operator actually uses — curated, with CFO examples. Prefer them pre-built? Grab a ready-made model.
PMT
FinanceThe level payment on a loan, per period.
Difficulty
1What is it?
PMT calculates the constant payment for a loan with a fixed rate over a fixed number of periods. Use a per-period rate (annual ÷ 12) and a term in months, and enter the present value as negative so the payment comes back positive.
2What it looks like
PMT(rate, nper, pv)- rate
- The rate per period — annual rate ÷ 12 for monthly.
- nper
- The number of periods (e.g. months).
- pv
- The present value / loan amount (enter as a negative).
3When you use it
- Monthly payment on a term loan or equipment finance.
- Sensitivity: how the payment moves with rate or term.
- Build an amortization schedule alongside IPMT/PPMT.
4See it in action
Change the inputs — the formula and result update live. Prefer the real thing? Download the Excel file and open it in Excel.
The monthly payment on a loan. Inputs live in B2:B4.
=PMT(B2/100/12, B3, -B4)$3,114 / mo| A | B | C | |
|---|---|---|---|
| 1 | Input | Value | Result |
| 2 | Annual rate % | $3,114 / mo | |
| 3 | Term (months) | ||
| 4 | Loan amount |
The lime cell holds the formula — click it (or any cell) to see its contents in the bar above, just like Excel. Edit the blue cells to watch it recompute.
5Common errors
Wrong signpv was entered positive.Fix: Enter the loan amount as negative so PMT returns a positive payment.
Way offRate and term use different period lengths.Fix: Match them — monthly rate with months, annual with years.
6Better functions & alternatives
- IPMT / PPMT — Split each payment into interest and principal.
- XNPV / XIRR — For valuing uneven, dated cash flows.
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