A PMT function is used when you want to know how much your monthly payment would be on a loan based on an interest rate and a constant payment schedule.  In the following example, you are looking at purchasing a car and will need to borrow $20,000.  The bank will give you a loan at 6.8% interest and you will have to pay back the loan in 3 years.

Step 1: How to calculate a payment using Excel PMT Function

The first step calculating your payment using Excel's PMT function is to enter the following:

In the cell you want your formula to appear:
1.  Type the equal sign
2.  Type PMT

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