How to Calculate an Annuity Payment in Excel | PMT Formula

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Have you ever wondered how to calculate an annuity payment? Payment for annuities is a complex calculation, and it's often best to leave the math up to professionals.

But if you need a rough estimate of what your monthly payments will be, you can use the PMT function in Excel.

To solve for an annuity payment, enter the rate (or interest) as a decimal and then enter into the number of periods that make up each year.

You would then divide this into 12 months and put that number into PMT as well. In this article we'll discuss more about calculating rates with PMT functions!

=PMT(rate,number_of_periods,present_value)

The rate is the annual interest you're being paid on the annuity.

The number of periods is how many payments you'll make each year.

And present_value is the lump sum amount you're investing up front.

For example, if I wanted to know what my monthly payment would be for an annuity with a rate of .06 and I wanted to make payments for 36 years, the calculation would look like this:

=PMT(.06,36*12,100000)

This would give me a monthly payment of $416.67.

As you can see, there's more to calculating annuity payments than just plugging in a few numbers! Be sure to consult with an expert before making any final decisions.

But the PMT function can be a great way to get a rough estimate of what your payments might look like. Thanks for reading!