IPMT Function in Excel
IPMT Function in Excel
In this video tutorial, we will see how to calculate a specific portion of interest on the basis of loan amount and loan tenure using the IPMT Function in Excel.
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What is IPMT Function in Excel?
IPMT Function is used to calculate a specific portion of interest on the basis of loan amount and loan tenure. The syntax of IPMT is quite similar to the syntax of PV Function in Excel. To understand better, IPMT helps used to distinguish between different portions or segments of any loan and to what time how much amount is to be paid on the basis of interest applicable can be calculated.
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IPMT Formula in Excel
=IPMT(rate, per, nper, pv, [fv], [type])
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Arguments:
Rate: The interest rate per period.
Per: The period for which you want to find the interest and must be in the range 1 to nper.
Nper: The total number of payment periods in an annuity.
Pv: The present value, or the lump-sum amount that a series of future payments is worth right now.
Optional Parameters:
[FV]: It is an optional argument. The FV or a cash balance you want to attain after the last payment is made. If FV is omitted, excel assumes it to be 0 (the future value of a loan, for example, is 0).
[Type]: This is also an optional argument. The number 0 or 1 indicates when payments are due. If this argument is omitted, Excel assumes it to be 0.
The Type can be 0 or 1, where:
0 = The payment is made at the end of the period;
1 = The payment is made at the start of the period.
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To know more about the Interest Payment Function in Excel, you can go to this link:
https://www.educba.com/ipmt-in-excel/
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