IPmt Function

Description

Returns the interest payment for a given period of an annuity based on periodic, constant payments and a constant interest rate.

Syntax

IPmt(rate, per, nper, pv[, fv[, type]])

The IPmt function has these named arguments:

Part	Description
rate	Interest rate per period. For example, if you get a car loan at an annual percentage rate (APR) of 10 percent and make monthly payments, the rate per period is 0.1/12, or 0.0083.
per	Payment period in the range 1 through nper.
nper	Total number of payment periods in the annuity. For example, if you make monthly payments on a four-year car loan, your loan has a total of 4 * 12 (or 48) payment periods.
pv	Present value, or value today, of a series of future payments or receipts. For example, when you borrow money to buy a car, the loan amount is the present value to the lender of the monthly car payments you will make.

Part	Description
fv	Future value or cash balance you want after you’ve made the final payment. For example, the future value of a loan is $0 because that’s it value after the final payment. However, if you want to save $50,000 for your child’s education over 18 years, then $50,000 is the future value. If omitted, 0 is assumed.
type	Number indicating when payments are due. Use 0 if payments are due at the end of the payment period, or use 1 if payments are due at the beginning of the period. If omitted, 0 is assumed.

Remarks

An annuity is a series of constant cash payments made over a period of time. An annuity can be a loan (such as a home mortgage) or an investment (such as a monthly savings plan).

The arguments rate and nper must be calculated using payment periods expressed in the same units. For example, if rate is calculated using months, nper must also be calculated using months.

For all arguments, cash paid out (such as deposits to savings) is represented by negative numbers; cash received (such as dividend checks) is represented by positive numbers.

Example

This example uses the IPmt function to calculate how much of a payment is interest when all the payments are of equal value. Given are the interest percentage rate per period (APR / 12), the payment period for which the interest portion is desired (Period), the total number of payments (TotPmts), the present value or principal of the loan (PVal), the future value of the loan (FVal), and a number that indicates whether the payment is due at the beginning or end of the payment period (PayType).

Const ENDPERIOD = 0, BEGINPERIOD = 1    ' When payments are made.= 0    ' Usually 0 for a loan.= "###,###,##0.00"            ' Define money format.= InputBox("How much do you want to borrow?")= InputBox("What is the annual percentage rate of your loan?")APR > 1 Then APR = APR / 100    ' Ensure proper form.= InputBox("How many monthly payments?")= MsgBox("Do you make payments at end of the month?", vbYesNo)PayType = vbNo Then PayType = BEGINPERIOD Else PayType = ENDPERIODPeriod = 1 To TotPmts        ' Total all interest.
    IntPmt = IPmt(APR / 12, Period, TotPmts, -PVal, FVal, PayType)
    TotInt = TotInt + IntPmtPeriod= "You'll pay a total of " & Format(TotInt, Fmt) = Msg & " in interest for this loan."Msg                        ' Display results.