Administration and Executive AssistantTier 530 minadvanced

IPMT and PPMT: Splitting a Loan Payment

Work out how much of one specific loan payment is interest and how much is principal.

What you will learn

• Use IPMT to find the interest portion of a specific payment number
• Use PPMT to find the principal portion of the same payment
• Explain why the interest/principal split changes every month even though the total payment does not

Excel skills

IPMT, PPMT, PMT · Loan Amortization

The task

The Loan Terms tab has a 48-month loan. Finance wants to know, for payment 1, payment 24 and the final payment, how much of each one is interest and how much is paying down the principal. The total payment is the same every month - the split between the two is not.

You work in a real spreadsheet in your browser, and your answer is checked against hidden traps the moment you submit.

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