PMT Calculator
Calculate periodic payment amounts for loans and annuities
PMT Formulas
Understanding PMT
PMT (Payment) is a financial function that calculates the periodic payment needed to pay off a loan or reach a savings goal. It's the Excel/Google Sheets function used for loan calculations and is fundamental to time value of money analysis.
For loans, PMT calculates what you pay each period to fully amortize the debt. For savings, it calculates how much to save each period to reach a future goal. The formula accounts for compound interest over time.
PMT assumes equal payments at regular intervals and a constant interest rate. Most mortgages, car loans, and personal loans use this standard amortization structure. Adjustable-rate loans require recalculation when rates change.
PMT Function Components
Present Value (PV)
Current loan balance or investment amount. Starting point.
Future Value (FV)
Target balance at end (usually 0 for loans, goal amount for savings).
Rate
Interest rate per period (annual rate ÷ periods per year).
Periods (N)
Total number of payments (years × payments per year).
Common PMT Calculations
| Scenario | PV | Rate/Periods | PMT Result |
|---|---|---|---|
| $300K Mortgage 30yr | $300,000 | 6%, 360 | $1,799/mo |
| $25K Car Loan 5yr | $25,000 | 7%, 60 | $495/mo |
| $10K Personal 3yr | $10,000 | 10%, 36 | $323/mo |
| Save $1M in 30yr | FV=$1M | 7%, 360 | $820/mo |
| $50K Student 10yr | $50,000 | 5%, 120 | $530/mo |
Using PMT Effectively
Match Rate & Periods
If paying monthly, use monthly rate (annual ÷ 12) and monthly periods (years × 12).
Sign Convention
In Excel, PMT returns negative (outflow). PV is positive for loans. FV is positive for savings goals.
Solve for Other Variables
Rearrange to find PV (how much can I borrow?), N (how long to pay off?), or rate.
Sensitivity Analysis
Test different rates and terms to see payment impact. Small rate changes have big effects.
Frequently Asked Questions
How do I use PMT in Excel?
=PMT(rate/12, periods*12, -loan_amount, 0, 0). For a $200K loan at 6% for 30 years: =PMT(0.06/12, 360, -200000) = $1,199. The negative PV gives a positive payment result.
What's the difference between beginning and end payments?
Most loans use end-of-period (ordinary annuity). Some leases use beginning-of-period (annuity due). Beginning-of-period payments are slightly lower because money is paid earlier. In Excel, set type=1 for beginning.
Can PMT calculate savings contributions?
Yes. Set PV=0 (or current savings), FV=goal amount, and solve for PMT. For $500K in 20 years at 7%: =PMT(0.07/12, 240, 0, -500000) = $964/month.
Why doesn't my PMT match the lender's quote?
Lenders may include insurance, taxes, or fees. APR differs from interest rate. Loan may have points or origination fees. Rounding differences. Compare principal and interest portion only.
Pro Tips
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