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We all know that financial calculations are very important for financial statements, budgets and financial planning. We also know that these calculations can be done with a calculator or spreadsheet.

But there are five key financial functions in Excel namely PMT, RATE, NPER PV FV which are commonly used to perform these calculations.

In this video, we will learn how to use these functions on Microsoft Excel 2021 so you can see the power of using spreadsheets as opposed to calculators!

First Letsee the syntax of PMT function;

Syntax: PMT(rate, nper, pv[, fv][, type])

rate: Is the interest rate per period. We need to use this argument as a real number

.nper: The number of payment periods. We need to use this argument as an integer value in financial functions.

pv: This is the present value or loan amount that we are trying to calculate the monthly payments for, again it needs to be a real number. There can't be any spaces before or after the comma in this argument.

fv: This is the future value of the loan or present value, it can be omitted if you don't want to calculate it.

type: The type of payment schedule either 0 for normal or -l for late payments. We will use 0 in our examples.

In this function first argument is the rate of interest and second argument is number of periods. In third parameter we have to enter present value or loan amount which will be used as a factor for calculation. Fourth optional financial value can be optionally entered and financial value here refers to the cash flow. Finally we have type of payment which can be 0 (due at beginning).

Now Let's look at the syntax of RATE Function;

Syntax: RATE(nper, pmt, pv, fv, type)

nper: The number of payment periods in an annuity. We need to use this argument as an integer value

pmt: Payment made each period on a loan, investment or savings account. It is often expressed as a percentage of the principal which is used here for financial calculations. Our financial function requires it be entered as a real number with no spaces before or after the comma.

pv: Present value is the total amount that a series of future payments is worth right now, financial function requires it be entered as a real number with no spaces within this argument.

fv: This element stands for financial value and can either be zero or omitted since we don't always need to calculate it.

type: The type of payment schedule either 0 for normal or -l for late payments, financial function requires that we use 0 as its argument.

rate() ... https://www.youtube.com/watch?v=H7CTK7uR92g