DrBob
In principle we are not supposed to give the answer fior people studying (at least thats what I understand). However, we can help you to try and understand your result.
Firstly, why don't you think the figure for PMT is correct - is it becuase the result is a minus figure?
The result is negative because it represents money that you would pay
Secondly is the 10,000 meant to be present value or future value?
>>Syntax
PMT(rate,nper,pv,fv,type)
For a more complete description of the arguments in PMT, see the PV function.
Rate is the interest rate for the loan.
Nper is the total number of payments for the loan.
Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal.
Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.
Type is the number 0 (zero) or 1 and indicates when payments are due.
Set type equal to If payments are due
0 or omitted At the end of the period
1 At the beginning of the period
Remarks
The payment returned by PMT includes principal and interest but no taxes, reserve payments, or fees sometimes associated with loans.
Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12 percent for rate and 4 for nper.
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The above information is from the fx help in Excel itself. I always used to teach people to use the FX help facility if they wanted to understand the syntax of the formula. I am not sure if you know how to do that, so I will jump in with both feet and explain how that is done
Click on a blank cell in the spreadsheet.
In the formula bar you will see an object that says "fx" - click on it once
When the Insert Function Dialogue Box appears - immediately type PMT and hit the Enter key on your keyboard
PMT should be the only function showing now.
In the bottom left hand corner of the dialogue box you will see text that is in blue which says "Help on this function" - Click on this once and all the help should appear on this particular function. There are examples of the sort of thing you are trying to do in there.
Does the above help in any way? If not come back and ask for any help on understanding the syntax and or the result
In principle we are not supposed to give the answer fior people studying (at least thats what I understand). However, we can help you to try and understand your result.
Firstly, why don't you think the figure for PMT is correct - is it becuase the result is a minus figure?
The result is negative because it represents money that you would pay
Secondly is the 10,000 meant to be present value or future value?
>>Syntax
PMT(rate,nper,pv,fv,type)
For a more complete description of the arguments in PMT, see the PV function.
Rate is the interest rate for the loan.
Nper is the total number of payments for the loan.
Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal.
Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.
Type is the number 0 (zero) or 1 and indicates when payments are due.
Set type equal to If payments are due
0 or omitted At the end of the period
1 At the beginning of the period
Remarks
The payment returned by PMT includes principal and interest but no taxes, reserve payments, or fees sometimes associated with loans.
Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12 percent for rate and 4 for nper.
<<
The above information is from the fx help in Excel itself. I always used to teach people to use the FX help facility if they wanted to understand the syntax of the formula. I am not sure if you know how to do that, so I will jump in with both feet and explain how that is done
Click on a blank cell in the spreadsheet.
In the formula bar you will see an object that says "fx" - click on it once
When the Insert Function Dialogue Box appears - immediately type PMT and hit the Enter key on your keyboard
PMT should be the only function showing now.
In the bottom left hand corner of the dialogue box you will see text that is in blue which says "Help on this function" - Click on this once and all the help should appear on this particular function. There are examples of the sort of thing you are trying to do in there.
Does the above help in any way? If not come back and ask for any help on understanding the syntax and or the result
