**Reply:** 2

**From:** Jas

> From: "Donna L" <djlarcos@optushome.com.au>

>

> Just trying to knock up a spreadsheet.

> What percentage do you have to add to

> account for a P & I loan repayment

> amount. E.g. 200 k loan at 10% equals

> 20K per year - P & I would be......? What

> this as a formula or multiplier based on

> 25 year loan. Thanks guys

If you're using excel, search in the help file for "home loan". There's

heaps there, and this is the formula you'd need.

Jas

Calculates the payment for a loan based on constant payments and a

constant interest rate.

Syntax

PMT(rate,nper,pv,fv,type)

For a more complete description of the arguments in PMT, see the PV

function.

Rate is the interest rate for the loan.

Nper is the total number of payments for the loan.

Pv is the present value, or the total amount that a series of future

payments is worth now; also known as the principal.

Fv is the future value, or a cash balance you want to attain after the

last payment is made. If fv is omitted, it is assumed to be 0 (zero),

that is, the future value of a loan is 0.

Type is the number 0 (zero) or 1 and indicates when payments are due.

Set type equal to If payments are due

0 or omitted At the end of the period

1 At the beginning of the period

Remarks

The payment returned by PMT includes principal and interest but no

taxes, reserve payments, or fees sometimes associated with loans.

Make sure that you are consistent about the units you use for specifying

rate and nper. If you make monthly payments on a four-year loan at an

annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for

nper. If you make annual payments on the same loan, use 12 percent for

rate and 4 for nper.

Tip

To find the total amount paid over the duration of the loan, multiply

the returned PMT value by nper.

Example 1

The example may be easier to understand if you copy it to a blank

worksheet.

How?

Create a blank workbook or worksheet.

Select the example in the Help topic. Do not select the row or column

headers.

Selecting an example from Help

Press CTRL+C.

In the worksheet, select cell A1, and press CTRL+V.

To switch between viewing the results and viewing the formulas that

return the results, press CTRL+` (grave accent), or on the Tools menu,

point to Formula Auditing, and then click Formula Auditing Mode.

1

2

3

4

A B

Data Description

8% Annual interest rate

10 Number of months of payments

10000 Amount of loan

Formula Description (Result)

=PMT(A2/12, A3, A4) Monthly payment for a loan with the above terms

(-1,037.03)

=PMT(A2/12, A3, A4, 0, 1) Monthly payment for a loan with the above

terms, except payments are due at the beginning of the period

(-1,030.16)

Example 2

You can use PMT to determine payments to annuities other than loans.

The example may be easier to understand if you copy it to a blank

worksheet.

How?

Create a blank workbook or worksheet.

Select the example in the Help topic. Do not select the row or column

headers.

Selecting an example from Help

Press CTRL+C.

In the worksheet, select cell A1, and press CTRL+V.

To switch between viewing the results and viewing the formulas that

return the results, press CTRL+` (grave accent), or on the Tools menu,

point to Formula Auditing, and then click Formula Auditing Mode.

1

2

3

4

A B

Data Description

6% Annual interest rate

18 Years you plan on saving

50,000 Amount you want to have save in 18 years

Formula Description (Result)

=PMT(A2/12, A3*12, 0, A4) Amount to save each month to have 50,000 at

the end of 18 years (-129.08)

Note The interest rate is divided by 12 to get a monthly rate. The

number of years the money is paid out is multiplied by 12 to get the

number of payments.