Right now, you have interest compounded quarterly. As you state, the PMT
function (and, in fact, all financial functions) require the payment and
interest rate be for the same period. Therefore, you need to convert your
interest rate to a compounded monthly rate.

Suppose your annual interest rate is 6%. Your compounded quarterly interest
rate is therefore 1.5%. If you borrowed $100, then one quarter later, you
would owe $101.50. So the question that needs to be answered is: what
monthly interest rate turns $100 into $101.50 after three months? The Rate
function will answer this, as in:

=rate(3,0,100,-101.50)
=0.498%

Use this in your PMT function, as in:

=pmt(rate(3,0,100,-101.50),nper,pv,fv,type)

Regards,
Fred.

"Beth" wrote in message
...
Hello

Is there a function I can use in Excel to calculate the payment on a
mortgage where;

1. Interest is calculated daily but capitalised quarterly
2. Payments are made monthly

I have used the PMT function but it does not take into account that the
interest is daily.

Any help would be appreciated.
Thank you