FinanceTier 515 minintermediate

Monthly Loan Repayment

Calculate a monthly loan repayment from an annual rate and a term in years.

What you will learn

• Convert an annual interest rate and term into monthly figures before using PMT
• Explain why using the annual rate and term directly in PMT computes an annual instalment instead of a monthly one
• Read a PMT result as a negative outflow, and know when to negate it for display

Excel skills

PMT · Financial Functions

The task

This loan is quoted with an annual interest rate and a term in years, but repayments are monthly. In B4, calculate the monthly repayment with PMT, converting the rate and term to a monthly basis first.

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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