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#1
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Equation for PMT formula
I need to recreate the PMT formula in a non-Excel equation format and looking
for some mathematics assistance. I also don't know the underlying logic built into the PMT formula for compounding interest; is it montly/annual? Thanks in advance for any assistance. |
#2
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The logic for PMT is "periodic" - it depends on the periodicity of the
interest rates and number of payments. The key is to make sure that the two are kept coordinated, e.g., if a monthly payment is wanted, the interest rate and number of payments need to be expressed as monthly rate (APR/12) and months (yrs * 12). If semi-annual payments are desired, the interest rate must be semiannual (APR/2) and number of periods equal to twice the number of years. For the formula, see Help's PV entry. In article , "Dave C. in Hudson Valley, NY" <Dave C. in Hudson Valley, wrote: I need to recreate the PMT formula in a non-Excel equation format and looking for some mathematics assistance. I also don't know the underlying logic built into the PMT formula for compounding interest; is it montly/annual? Thanks in advance for any assistance. |
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