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PMT used in Excel

 
 
Tuffi
 
Reply Sat 19 Sep, 2009 06:49 pm
What do the letters PMT stand for? I know its a analysis tool, but that does P stand for, M stand for, T stand for ?
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Type: Question • Score: 3 • Views: 17,937 • Replies: 6
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chai2
 
  1  
Reply Sat 19 Sep, 2009 07:39 pm
since it's based on constant payments, I assume PMT stands for payment.
contrex
 
  2  
Reply Sun 20 Sep, 2009 01:53 am
Excel's PMT function calculates the periodic payment for an annuity, assuming a stream of equal payments and a constant rate of interest. The PMT function uses the following syntax:

=PMT(rate,nper,pv,[fv],[type])

As with the other common financial functions, rate is the interest rate per period, nper is the number of periods, pv is the present value or the amount the future payments are worth presently, fv is the future value or cash balance that you want after the last payment is made (Excel assumes a future value of zero when you omit this optional argument as you would when calculating loan payments), and type is the value 0 for payments made at the end of the period or the value 1 for payments made at the beginning of the period (if you omit the optional type argument, Excel assumes that the payment is made at the end of the period).

The PMT function is often used to calculate the payment for mortgage loans that have a fixed rate of interest. The following figure shows a sample worksheet that contains a table using the PMT function below to calculate loan payments for a range of interest rates (from 5.5 percent to 6.75 percent) and principals ($475,000 to $484,000).

=PMT(B$6/12,$B$4*12,$A7)

The table uses the initial principal that you enter in cell B2, copies it to cell A7, and then increases it by $1,000 in the range A8:A16. The table uses the initial interest rate that you enter in cell B3, copies to cell B6, and then increases this initial rate by 1/4 of a percent in the range C6:G6. The term in years in cell B4 is a constant factor that is used in the entire loan payment table.
lmur
 
  -2  
Reply Sun 20 Sep, 2009 03:43 am
@contrex,
You forgot to post a link, cuntrex.
http://www.dummies.com/how-to/content/calculating-loan-payments-with-excel-2007s-pmt-fun.html

Wouldn't want to be claiming the credit for all of that now, would you? Unless you, of course, work for dummies.com (in which case I apologise).
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abhijitbabu
 
  1  
Reply Sat 25 May, 2013 12:08 am
@chai2,
according to me PMT stands for Per Month Transaction
roger
 
  1  
Reply Sat 25 May, 2013 12:12 am
@abhijitbabu,
Good of you to cite your source.
0 Replies
 
contrex
 
  1  
Reply Sat 25 May, 2013 12:13 am
@abhijitbabu,
You have answered a question asked nearly 4 years ago.
0 Replies
 
 

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