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In this project, you will realize that you really need to invest in a
new computer to complete course assignments for the school’s use. You
will create a worksheet, use the PMT function, and format a worksheet to
show a comparison of two electronic computers that you are interested
in purchasing. You will make a comparison of the two items and determine
which one is feasible to purchase.
- The Excel PMT function is used to calculate the payment for a loan based on constant payments and a constant interest rate.
- Click here for more information on how to use the PMT function.
To complete this assignment, perform the following tasks:
- Data has been provided for you to generate a payment for each of the
two products to help determine which product is feasible for you to
purchase for school purposes. Click here to access the data.
- The loan parameters have been entered into the worksheet. Click
in cells B8 and E8 to calculate the amount to finance as Price – down
payment – rebate.
- Save the workbook as “FirstInitial_LastName_Purchase_solution.xlsx”
- Hint: Click Insert function and select PMT for payment.
- Merge and center the titles in Cells A1:E1. Format your
worksheet by including color as well as providing an appropriate clip
art to accent the document.
- Indent the content in cells A9:A14 and show the Payment amount in font size 14.
- Indent the content in cells D9:D14 and show the Payment amount in font size 14.
- Save the School Computer Purchase Analysis spreadsheet. Submit the School Computer Purchase Analysis spreadsheet.
This article describes the formula syntax and usage of the PMTfunction in Microsoft Excel.
Calculates the payment for a loan based on constant payments and a constant interest rate.
PMT(rate, nper, pv, [fv], [type])
Note For a more complete description of the arguments in PMT, see the PV function.
The PMT function syntax has the following arguments:
Rate Required. The interest rate for the loan.
Nper Required. The total number of payments for the loan.
Pv Required. The present value, or the total amount that a series of future payments is worth now; also known as the principal.
Fv Optional. The future
value, or a cash balance you want to attain after the last payment is
made. If fv is omitted, it is assumed to be 0 (zero), that is, the
future value of a loan is 0.
Type Optional. The number 0 (zero) or 1 and indicates when payments are due.
Set type equal to
If payments are due
0 or omitted
At the end of the period
At the beginning of the period
The payment returned by PMT includes principal and
interest but no taxes, reserve payments, or fees sometimes associated
Make sure that you are consistent about the units you
use for specifying rate and nper. If you make monthly payments on a
four-year loan at an annual interest rate of 12 percent, use 12%/12 for
rate and 4*12 for nper. If you make annual payments on the same loan,
use 12 percent for rate and 4 for nper.
Tip To find the total amount paid over the duration of the loan, multiply the returned PMT value by nper.
Use the embedded workbook shown here to work with examples
of this function. You can inspect and change existing formulas, enter
your own formulas, and read further information about how the function
This example uses the PMT function to determine the monthly payment for a loan.