Picture of What is a PMT function?
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.
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Step 1: How to calculate a payment using Excel PMT Function

Picture of 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

Step 2: NPER

Picture of NPER
The next step is to enter the number of payments for the life of the loan.  If you have a three year loan and you are making monthly payments, then you will have 36 (12 months multiplied by the number of years) NPER.

Step 3: PV

Picture of PV
The last step in the PMT function is to enter the PV.  PV stands for present value and represents the amount of money that you are borrowing.  For example:  If you are borrowing $20,000, the PV would be 20000.  Take note that you do not include commas in Function Arguments.