PPMT Function In Excel - How To Use? Formula, Examples, Errors.

What Is PPMT Function In Excel?

The Periodic Payment or the PPMT function in Excel calculates the principal part/portion of the total loan amount. We can find the initial, final, or any periodic principal amount.

The PPMT Excel function is an inbuilt financial function, so we can insert the formula from the “Function Library” or enter it directly in the worksheet.

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Frequently Asked Questions (FAQs)

1. What does the PPMT function in Excel mean in Excel?

The PPMT function in Excel calculates the principal share of the given loan payment and payment period. The payment for the initial, final, or any period in between is evaluated using the PPMT function in Excel.

The syntax of the PPMT function in Excel is =PPMT(rate,per,nper,pv,[fv],[type])

2. How does Excel PPMT function in Excel work in Excel?

The PPMT function in Excel works in Excel as follows:

1. Select an empty cell for the output.
2. Type =PPMT( in the selected cell. [Alternatively, type =P or =PP and double-click the PPMT function in Excel from the list of suggestions shown by Excel.]
3. Enter the arguments as cell values or cell references and close the brackets.
4. Press the “Enter” key.

For example, we apply the PPMT function in Excel to calculate the principal amount of the loan amount of ‘$1,00,000’, and the period is “5 years” at ‘3%’ of the interest rate.

Select cell B5, enter the formula =PPMT(B4/12,2,B3*12,-B2), and press the “Enter” key.

The result is ‘$1,550.74’, as shown above.

3. Where is the PPMT function in Excel in Excel?

The PPMT function in Excel is in the Formulas tab as follows:

Choose an empty cell for the output → select the “Formulas” tab → go to the “Function Library” group → click the “Financial” option drop-down → select the “PPMT” function, as shown below.

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