How it works.
The PMT function calculates monthly or annual loan payments. To find a monthly payment, you must divide the annual interest rate by 12 and multiply the number of loan years by 12 to get the total number of periods.
💡 In simple terms.
Calculates the monthly payment for a loan (like a house mortgage or car loan) based on interest rate and loan term.
"Think of this like calculating how much pocket money you have to pay back each month for buying a console on loan."
Formula syntax.
Standard Excel Notation=PMT(rate, nper, pv, [fv], [type])[like_this] are optional; all other arguments are required.Formula arguments.
Every parameter accepted by the PMT function is detailed below.
The interest rate for the loan. Divide annual rate by 12 for monthly.
Example value:B2/12The total number of payments for the loan. Multiply years by 12 for monthly.
Example value:C2*12The present value, or the total amount that a series of future payments is worth now (loan principal).
Example value:A2The future value, or cash balance wanted after last payment is made. Defaults to 0.
Default: 00 = Payments due at end of period (default), 1 = Payments due at start of period.
Default: 0Simple example.
Step-by-Step ScenarioMortgage Monthly Payment Calculator
Calculate the monthly payment for a loan principal, annual interest rate, and term in years.
| Loan Principal | Annual Rate | Term (Years) | Monthly Payment | Units |
|---|---|---|---|---|
| 250000 | 0.045 | 30 | — | Monthly interest rate = B2/12 |
| 15000 | 0.060 | 5 | — | Monthly periods = C2*12 |
| 350000 | 0.052 | 15 | — | — |
=-PMT(B2/12, C2*12, A2)Evaluates PMT over the sample table cells, placing the verified output in cell D2:D6.
Formula generator.
Full Generator WizardCustomize the argument fields below to generate a tailored PMT formula ready to paste directly into your worksheet.
=PMT()Expected result behavior.
Returns "Calculated output" based on sample evaluation criteria and active cell references.
Best Practices
- The payment returned by PMT is a negative number because it represents cash going out. Wrap the PV or the entire formula in a minus sign (e.g. `=-PMT(...)`) to display the result as a positive number.
- Be extremely careful to use consistent units for rate and nper.
Common Mistakes
- PMT calculates principal and interest only. It does not account for taxes, insurance, or transaction fees.
Platform & version compatibility.
Verified platform compatibility matrix based on actual spreadsheet calculation engine specifications.
Core standard function supported across all modern and legacy Microsoft Excel versions (365, 2021, 2019, 2016, 2013, 2010), as well as Excel for the Web and Mac.
100% compatible with Google Sheets. Uses identical argument order, data types, and standard calculation logic.
Frequently asked questions.
Technical Q&ACan I use PMT across different worksheets in Excel?↓
Yes. You can reference cells located on other sheets by including the sheet name followed by an exclamation mark, for example: =PMT(Sheet2!A2:A10). If the sheet name contains spaces, enclose it in single quotes: ='Q1 Report'!A2:A10.
What is the most common reason for errors in PMT?↓
PMT calculates principal and interest only. It does not account for taxes, insurance, or transaction fees.
Does PMT work identically in Google Sheets?↓
Yes, PMT is supported in both Microsoft Excel and Google Sheets with standard evaluation behavior.