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How to calculate a loan payment in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=PMT(B2/12,C2,-A2)✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Loan Amount | Annual Rate | Months | Monthly Payment |
| 10000 | 0.06 | 36 | |
| 25000 | 0.05 | 60 | |
| 5000 | 0.08 | 24 | |
| 50000 | 0.04 | 120 |
=PMT(B2/12,C2,-A2)→304.2193745156
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Step by step
- 1Set up columns: Loan Amount (A), Annual Interest Rate (B), and Number of Monthly Payments (C).
- 2In the Payment column enter =PMT(B2/12,C2,-A2). Dividing B2 by 12 converts the annual rate to monthly. Negating A2 ensures the result is a positive payment amount.
- 3Format the result as Currency. The value represents the monthly payment required to pay off the loan.
Tips
- To find total interest paid, multiply the PMT result by the number of payments and subtract the loan amount: =(PMT(B2/12,C2,-A2)*C2)-A2.
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Frequently asked
Why is my PMT result negative?
PMT returns a negative value by convention because it represents cash flowing out. Negate the PV argument (use -A2 instead of A2) to get a positive result.
Can I use PMT for quarterly or annual payments?
Yes. For quarterly payments divide the rate by 4; for annual payments use the rate as-is. Adjust the nper argument to match the total number of those payment periods.
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