The PMT (Payment) function computes the payments necessary to repay a loan. The required arguments are the interest rate, the number of payments, and the amount of the loan. Excel will assume all time periods are the same, i.e. if the interest rate and the number of payments are specified in years, the payment will also be in years.
To enter a PMT function in the above worksheet:
o Highlight cell B7.
o Click the 'Insert Function' icon
o In the 'Or select a category:' field choose the 'Financial' category then select the 'PMT' function and click OK.
o The 'Function Arguments' dialog box appears. The first argument required is the interest rate. Type B4/12. (The interest rate must be the rate per month to get a monthly payment as a result)
o Click in the box for the second argument, Nper (number of periods).
o Enter B5*12 which is the number of monthly payments.
o Click in the box for the third argument, Pv (present value).
o Enter B3. Click OK.