Here's the equation I found for calculating payment (PMT) if PV (mortgage
amount), n (number of payment periods) and i (interest rate) are known:

http://www.frickcpa.com/tvom/TVOM_formulas.asp

(see PMT - Present value of Annuity) Note that "i" is the interest rate per
payment period. If payment period is monthly, "i" is (annual interest
rate/12) and the annual interest rate is in decimal form (0.08) vs..
percentage (8%).

The formula here is a lot easer to follow, IMHO.

Hope that this helps.



"Mujeeb ur Rehman, FBL-GRW-PK" wrote:

Even I have obtained the result by using the function PMT. But I still
consfuse that how PMT function works, what is its background / machanizm.
When we give parameters in this function, how this function manipulate the
parameters and give us result?

Also how can find any function's background / machanizm in excel help?