A = Payment amount per period. P = Initial principal or loan amount (in this example, $10,000)
- P = $10,000.
- r = 7.5% per year / 12 months = 0.625% per period (0.00625 on your calculator)
- n = 5 years x 12 months = 60 total periods.
Moreover, how do I calculate annual loan payment in Excel?
- The rate argument is the interest rate per period for the loan. For example, in this formula the 17% annual interest rate is divided by 12, the number of months in a year.
- The NPER argument of 2*12 is the total number of payment periods for the loan.
- The PV or present value argument is 5400.
Moreover, how do you calculate a loan repayment schedule?
Starting in month one, take the total amount of the loan and multiply it by the interest rate on the loan. Then for a loan with monthly repayments, divide the result by 12 to get your monthly interest. Subtract the interest from the total monthly payment, and the remaining amount is what goes toward principal.
How do you calculate regular payment?
Divide the annual interest rate by 2 to calculate the semiannual rate. For example, if the annual interest rate equals 9.2 percent, you would divide 9.2 by 2 to find the semiannual rate to be 4.6 percent.
You can compute the loan payment if you know the amount borrowed, the interest rate and the length of the loan (number of payment periods). For example, if you borrow $10,000 at 7% over 20 years, your annual payment is $943.93.
=PMT(rate, nper, pv, [fv], [type]) The PMT function uses the following arguments: Rate (required argument) – The interest rate of the loan. Nper (required argument) – Total number of payments for the loan taken.
Present value (PV) is the current value of a stream of cash flows. PV can be calculated in excel with the formula =PV(rate, nper, pmt, [fv], [type]). If FV is omitted, PMT must be included, or vice versa, but both can also be included. NPV is different from PV, as it takes into account the initial investment amount.