# Crazy PMT function helps in calculating monthly EMI

Share Now

PMT function is one of the financial function in excel, which calculates the periodic payment required to pay off a loan or investment.

Syntax:

### = PMT(rate, nper, pv, [fv], [type])

 rate Interest rate per period. nper Number of period over which loan or investment to be paid. pv Present value of the loan amount. [fv] This is optional parameter that specifies the future value of loan amount by default it takes zero. [type] This is also an optional argument define payment is made at the begning of the month or end. 0   – Payment made at the end of the month 1   – Payment made at the beginning of the month In the above spreadsheet screenshot, we have used PMT function in the cell “D6” to calculate monthly payment for loan amount.

= PMT (D3/12, D4*12, -D2)
=PMT(rate/12, year*12, – loan amount)
D2 = Loan Amount (taken negative in the function because considered as debt)
D3 = Interest rate (payment are made monthly so we have divided rate by 12)
D4 = number of payments ( to calculate the monthly payment, years multiplied by 12)
D6 = Monthly Payment (using PMT function)