The PMT Excel function or payment function allows you to calculate what repayments are required to fully amortise a loan.
In this segment you will learn how to activate and use the PMT Excel function.
In this example we have a loan of 100 000, at an interest rate of 11% over a period of five years, and we’d like to know what repayment will fully amortise this loan.
We can use the PMT function in Excel.
And what you’ll see is it asks for a bit of information about the underlying loan,
And there we have the repayment that will be required to fully amortise this loan. As a proof we have a little amortisation table here,
Therefore this correctly amortises the loan.
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