Answer:
The PMT function returns the payment amount for a loan based on an interest rate and a constant payment schedule.
The syntax for the PMT function is: PMT(interest_rate, number_payments, PV, FV, Type)
interest_rate = interest rate for the loan.
number_payments = number of payments for the loan.
PV = present value or principal of the loan.
FV (optional) = Future value or the loan amount outstanding after all payments have been made. If this parameter is omitted, the PMT function assumes a FV value of 0.
Type (optional) = Indicates when the payments are due. Type can be one of the following values:
-- 0 = Payments are due at the end of the period. (default)
-- 1 = Payments are due at the beginning of the period.
If the Type parameter is omitted, the PMT function assumes a Type value of 0.
EXAMPLE:
Find the monthly payment for a $6,400 loan at an annual rate of 8.25%. The loan is paid off in 2 years (ie: 2 x 12). All payments are made at the beginning of the period.
=PMT(8.25%/12, 2*12, 6400, 0, 1)