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How to calculate a loan payment in Excel and Google Sheets

Topic:Finance basics
Excel & Google Sheets
=PMT(B2/12,C2,-A2)
✓

Verified example

Computed by a real spreadsheet engine on the sample data below.

Loan AmountAnnual RateMonthsMonthly Payment
100000.0636
250000.0560
50000.0824
500000.04120

=PMT(B2/12,C2,-A2)→304.2193745156

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Step by step

  1. 1Set up columns: Loan Amount (A), Annual Interest Rate (B), and Number of Monthly Payments (C).
  2. 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.
  3. 3Format the result as Currency. The value represents the monthly payment required to pay off the loan.

Tips

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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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Formulas used

PMTIPMTPPMT

Written and reviewed by FormulaCraft Team. Each formula on this page is run through our verification engine before publishing.

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