Use the PMT Function


Tutorial Home >Software >Office >Microsoft Office 2000 Projects >How do I use the PMT function for mortgage analysis in Office 2000?
Tutorial Home >Software >Office >Microsoft Office 2000 Projects >Mortgage Analysis >Use the PMT Function

  Step 1:  Enter the Rate

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First, you need to enter the interest rate in the Rate text box. Here I've entered "Interest" divided by 12 for 12 months. Note that you use a forward slash (/) for a division sign. You divide the interest rate by 12 because you want to calculate monthly payments on the mortgage amounts.
  Step 2:  Enter Nper

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The Nper refers to the term—that is, the number of years over which you'll pay the mortgage. Usually you take out a mortgage for 25 or 30 years. You will multiply the term by 12 so that it is expressed in months instead of years. Here I've entered a term of 30 years multiplied by 12 for a total of 360 months.
  Step 3:  Enter the PV

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In the Pv text box you enter the mortgage amount shown cell B4. Since you named cell B4 "Mortgage", you just need to enter "Mortgage" in the Pv text box. Note that you need to also type a "minus" sign before Mortgage has shown since the PV amount needs to be expressed as a negative number in order for the PMT formula to yield accurate results.
  Step 4:  Click OK

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Click OK to exit the PMT dialog box. As you can see, you would make a monthly payment of $839.37 on a mortgage of $140,000 at a 6% annual interest rate. That's my kind of math!