We can get this with the PPMT() function. Principal Paid is the amount of principal paid in each month.=ROUND(NPER($E$7/12,$E$10,$D13),0) will tell us how many months it is rounded. We can use NPER function to get the answer here. Effective term is how long it would take you to pay off the mortgage based on the opening balance, and agreed upon monthly payment (calculated in Step 1) and interest rate (Cell E7).For subsequent months, this will same as previous month’s closing balance. Opening Balance is same as loan amount for month=1.Related: Read about SEQUENCE and other Dynamic Array functions in Excel. You can use =SEQUENCE(360) to automatically generate all the months. So, set up a range of 360 months (or longer if you want to cater for longer mortgages). In my case, let’s say loan is $500,000, term is 20 years and APR (Interest rate) is 5.35% per annum.Īs extra payment will bring down the outstanding loan term, we need to set up an amortization table to see the impact clearly. Here, we have the annual interest rate in cell B2, monthly payment in cell B3 (entered as a negative number), and loan amount in cell B4.Step 1: Calculate the monthly (or weekly / fortnightly) payment:Īssuming you have the Loan amount, term & APR in three cells E5, E6 & E7, we can use the PMT() function to calculate the periodic payment. For an annuity, you can use the future_value and type arguments as described earlier.Pmt: The monthly payment entered as a negative number.Rate: The annual interest rate (divided by 12 in the formula) or the flat rate.The syntax for the formula is NPER(rate, pmt, principal, future_value, type) with the first three arguments required. Here, we’ll use the NPER (number of periods) function in Excel. This lets you then adjust the rate or payment to increase or decrease the number of years for repayment. With the interest rate, payment amount, and loan amount, you can see the term in years. Maybe you’re trying to decide the best loan term for your situation. Tip: To calculate a monthly interest rate rather than yearly, remove the *12 from the end of the formula. Now you can see the interest rate you’re paying on the loan with a simple formula. You would enter the following formula in cell B5 to calculate your interest rate: Here, we have our loan term in years in cell B2, monthly payment in cell B3 (entered as a negative number), and loan amount in cell B4. For an annuity, you can use the future_value and type arguments as described above and guess_rate for your estimated rate.Term: The term in years (multiplied by 12 in the formula) or the total number of payments. The syntax for the formula is RATE(term, pmt, principal, future_value, type, guess_rate) with the first three arguments required. All you need is your loan term, payment amount, principal, and Excel’s RATE function. If you have a current loan and are unsure of your annual interest rate, you can calculate it in just minutes. The formula result updates automatically. You can enter a lower interest rate or higher number of payments to get your payment amount where it needs to be. With the formula in place, you can then change the amounts you’ve entered to see how this affects the payment. You would enter the following formula in cell B5 to determine your payments: Here, we have our annual interest rate in cell B2, number of payments in cell B3, and loan amount in cell B4.
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