For an investment where you pay a lump sum at the start, presentvalue is negative. For a loan where you receive a lump sum at the start, presentvalue is positive. When payments are made at the start of each period, the relevant IPMT interest arises during the preceding period.īy convention, money that you receive is positive, and money you pay is negative. When payments are made at the end of each period, the relevant IPMT interest arises during that period. Together they add up to the actual payment, given by PMT. IPMT returns the interest paid in the payment of that period. PPMT returns the capital repaid in the payment of a specified period. Over time (as you pay off capital), the interest becomes less and the capital repayment becomes more. With a fixed rate loan, where you make a constant payment each period to pay off the loan over the term, some of each period payment is interest on the outstanding capital, and some is a repayment of capital. Type: when payments are made (optional - defaults to 0):ġ - at the start of each period (including a payment at the start of the term). Presentvalue: the initial sum borrowed or invested.įuturevalue: the cash balance you wish to attain at the end of the term (optional - defaults to 0). Numperiods: the total number of payment periods in the term. Period: the period of the payment whose repaid capital portion is to be calculated, numbered from 1.
PPMT(rate period numperiods presentvalue futurevalue type) rate: the interest rate per period. Returns the portion of the periodic payment which is repaid capital for a fixed rate loan or annuity.
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