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PMT() Formula

  1. #1
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    PMT() Formula

    Hello all, I need a wee bit of help with Excel's PMT formula, because I was given a worksheet with two different formulas and I seem to get two different results.

    I have the following values:
    Loan: 1861.52
    APR: 24.99%
    Loan Time (in months): 24

    So to calculate the interest on the number of "Odd" days (not a full month), I use:
    My result is 21.79, which means I get to charge 21.79 in interest for 17 days. With this, the monthly (30 days) interest comes out to be $38.62.

    So, 1861.52+21.79 = 1883.31.

    So then, I assume they used this formula to calculate the monthly payment with 24.99% APR over 24.99 payments.


    The resulting interest over these 24 months comes out to be $550.62, which on a monthly basis is about $21.78 dollars.

    Does the PMT() formula use a different method to calculate interest? When I do it manually, my result says that the monthly interest needs to be $38.62...

    I could attach the workbook, if need be, but I hope that you can understand it from this post.

    Thanks in advance.

  2. #2
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    I think you need attach the workbook
    And there are some questions:
    Does this loan interest calculated on a Day to Day base, or monthly?
    Is it paid monthly?
    Why did you use 1883.31 as the PV, not 1861.52?
    Please Login or Register  to view this content.
    I need your support to add reputations if my solution works.

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