Returns the interest payment for a given period for an investment based on periodic, constant payments and a constant interest rate.
Syntax
IPMT(rate,per,nper,pv,fv,type)
Argument | Description | Remarks |
|---|
rate | The interest rate per period. For example, if you obtain an automobile loan at a 10 percent annual interest rate and make monthly payments, your interest rate per month is 10 percent divided by 12, or 0.83 percent. You would enter 10%/12, or 0.83%, or 0.0083, into the formula as the
rate. | -
The cash that you pay out, such as deposits to savings or other withdrawals, is represented by negative numbers. The cash that you receive, such as dividend checks and other deposits, is represented by positive numbers.
-
Make sure that you are consistent about the units that you use for specifying
rate and
nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for
rate and 4*12 for
nper. If you make annual payments on the same loan, use 12% for
rate and 4 for
nper.
|
per | The period for which you want to find the interest. It must be between 1 and
nper. | -
The cash that you pay out, such as deposits to savings or other withdrawals, is represented by negative numbers. The cash that you receive, such as dividend checks and other deposits, is represented by positive numbers.
|
nper | The total number of payment periods in an annuity. For example, if you obtain a four-year car loan and make monthly payments, your loan has 4*12 (or 48) periods. You would enter 48 into the formula for
nper. | -
The cash that you pay out, such as deposits to savings or other withdrawals, is represented by negative numbers. The cash that you receive, such as dividend checks and other deposits, is represented by positive numbers.
-
Make sure that you are consistent about the units that you use for specifying
rate and
nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for
rate and 4*12 for
nper. If you make annual payments on the same loan, use 12% for
rate and 4 for
nper.
|
pv | The present value, or the lump-sum amount that a series of future payments is worth now. | -
The cash that you pay out, such as deposits to savings or other withdrawals, is represented by negative numbers. The cash that you receive, such as dividend checks and other deposits, is represented by positive numbers.
|
fv | The future value, or a cash balance that you want to have after the last payment is made. For example, if you want to save $50,000 to pay for a special project in 18 years, then $50,000 is the future value. You could then make a conservative guess at an interest rate and determine how much you must save each month. | -
If
fv is omitted, it is assumed to be 0 (the future value of a loan, for example, is 0).
-
The cash that you pay out, such as deposits to savings or other withdrawals, is represented by negative numbers. The cash that you receive, such as dividend checks and other deposits, is represented by positive numbers.
|
type | The timing of the payment. | -
0 (zero) = at the end of the period
1 = at the beginning of the period
-
The cash that you pay out, such as deposits to savings or other withdrawals, is represented by negative numbers. The cash that you receive, such as dividend checks and other deposits, is represented by positive numbers.
|
An annuity is a series of constant cash payments made over a continuous period. For example, a car loan or a mortgage is an annuity. In annuity functions, the cash you pay out, such as a deposit to savings, is represented by a negative number; cash you receive, such as a dividend check, is represented by a positive number. For example, a $1,000 deposit to the bank would be represented by the argument -1000 if you are the depositor and by the argument 1000 if you are the bank.
Example
To make the following example easier to understand, you can copy the data to a blank sheet and then enter the function underneath the data. Do not select the row or column headings (1, 2, 3... A, B, C...) when you copy the sample data to a blank sheet.
 | Note The interest rate is divided by 12 to obtain a monthly rate.
The years the money is paid out is multiplied by 12 to obtain the number of payments.
|
 | | 1 | | 2 | | 3 | | 4 | | 5 |
| | A | B | | Data | Description | | 10% | Annual interest rate | | 1 | Period for which you want to find the interest | | 3 | Years of the loan | | 8000 | Present value of loan | | Formula | Description (Result) | | =IPMT(A2/12,A3*3,A4,A5) | Interest due in the first month for a loan with the terms listed in the table (-22.41) | |
=IPMT(A2,3,A4,A5) | Interest due in the last year for a loan with the terms listed in the table, where payments are made yearly (-292.45) |
|
