Beginner
Work out a monthly loan payment
Use PMT to find the fixed monthly payment on a loan.
What you'll build: the fixed monthly payment for a car loan.
What you need: Nothing but this page.
Why this matters: PMT is the function behind every loan and mortgage calculator.
Step 1 — The three things PMT needs
A $25,000 loan, 5% annual rate, over 5 years (60 months). The rate must be per month
(0.05/12), and the loan is entered as negative because it's money you receive.
=PMT(0.05/12, 60, -25000) // => 471.7808411002748What just happened: PMT(rate_per_period, number_of_periods, present_value) returns the
payment. The result is positive — the amount you pay each month.
Try changing…
- A different loan amount, rate, or number of months.
You learned
- Convert an annual rate to monthly by dividing by 12.
- Enter the loan amount as a negative number.
Next: Explore the Beginner learning path for what to learn next.