Instructions for using the IPMT function in Excel
Before you decide to invest in a certain field, make sure you consider it very carefully, calculating what the capital is spent and how much is earned over the period of time with how much interest. . The following article is a guide to using IPMT function to help you answer this question.
Instructions for using the IPMT function in Excel Picture 1
Description: The function returns the interest payment for an investment within a certain agreed period.
Syntax: IPMT (rate, per, nper, pv, [fv], [type]) .
Inside:
- rate: The interest calculated periodically, is required parameters.
- per: The number of periods for interest calculation is from 1 -> nper, is a required parameter.
- nper: The total number of terms to be paid during the investment period, is the required parameter.
- pv: The present value of the loan, is the required parameter.
- fv: Future value obtained after investment, is an optional parameter if the default value is omitted to 0.
- type: Time of interest payment, Optional parameter if omitted by default is 0. There are 2 values of type = 0 => final payment, type = 1 => payment at the beginning of the period.
Example: Give the following data table:
Instructions for using the IPMT function in Excel Picture 2
Calculate:
- Interest is due in the 1st month after investing.
- Interest due in the last year of the loan.
Perform the problem:
1. Interest is due in the 1st month after investing
In the cell to calculate enter the formula: = IPMT (D5 / 12, D6, D7 * 12, D8) .
Instructions for using the IPMT function in Excel Picture 3
Result:
Instructions for using the IPMT function in Excel Picture 4
2. Interest is due in the last year of the loan
In the cell to calculate enter the formula: = IPMT (D5,5, D7, D8) .
Instructions for using the IPMT function in Excel Picture 5
Result:
Instructions for using the IPMT function in Excel Picture 6
The above is a detailed guide on how to pay interest when you decide to invest in a certain period of time. Compare it with the interest payments and the profits earned and then make a decision.
I wish you the best investment efficiency.
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