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Discrepancy in PMT function ( annual payment and monthly payment)

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    Discrepancy in PMT function ( annual payment and monthly payment)

    Why the monthly payment multiplied by 12 is not equal to annual payment calculated with PMT funtion.

    E.x:

    Rate: 5%
    Period: 10 years
    Loan Amount: $1,000,000

    PMT(5/12,10*12,1000000)*12 is not equal to PMT(5,10,1000000)

    Thanks



    Discrepancy in PMT function ( annual payment and monthly payment)

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    Forum Expert tim201110's Avatar
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    Re: Discrepancy in PMT function ( annual payment and monthly payment)

    https://en.wikipedia.org/wiki/Annuity

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    Forum Guru shg's Avatar
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    Re: Discrepancy in PMT function ( annual payment and monthly payment)

    I assume you meant

    PMT(5%/12, 10*12, 1000000) * 12 and PMT(5%, 10, 1000000

    You pay more interest with annual rather than monthly payments.
    Last edited by shg; 05-10-2017 at 11:31 AM.
    Entia non sunt multiplicanda sine necessitate

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