The PPMT Function in Excel is used to calculate the principle of a given loan payment. If all you a trying to determine is the principle of a loan, this is the function to use. You are able to determine the principle for the first period, last period, or any specified period in between.
=PPMT (rate, per, nper, pv, [fv], [type])
- rate – Interest rate per period.
- per – Specified payment period of interest.
- nper – The total number of payments for the loan.
- pv – The present value/total value of all payments now.
- fv – [optional] The cash balance desired after last payment is made. Defaults to 0.
- type – [optional] When payments are due.
- 0 = end of period. Default
- 1 = beginning of period.
PPMT Function Usage Example
Let’s look at the following example using PPMT in Excel. By using the formula, we can determine the principle for a specific period. Make sure to download the demo file for a better understanding. Based on our example, the principle after Period 1 is $320.43.