Microsoft KB Archive/214091

= XL: Finding the Balance of a Loan for a Given Period =

Article ID: 214091

Article Last Modified on 1/24/2007

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APPLIES TO


 * Microsoft Excel 2000 Standard Edition
 * Microsoft Excel 2002 Standard Edition
 * Microsoft Excel 97 Standard Edition
 * Microsoft Excel 2001 for Mac
 * Microsoft Excel 98 for Macintosh

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This article was previously published under Q214091





SUMMARY
To calculate the balance of a loan for any period during the life of the loan, use the IPMT function to calculate the interest payment for the next period and divide it by the interest rate of the loan.



MORE INFORMATION
The following examples demonstrate the use of the IPMT function to find the balance of a loan using the following formula

=IPMT(

where  is the interest per payment period,   is the period for which you want to find the balance,   is the total number of payment periods, and   is the present value of the loan.

Example 1: Monthly Payments
To find the balance of a $65,000 loan after 36 payments (3 years), when the rate of the loan is 9.5 percent per year, and payments are made monthly over a period of 30 years, calculate the interest payment (IPMT) of the loan for the next payment period and divide it by the computed interest rate, as in the following example.

In cell A1 of an Excel worksheet, enter:

=IPMT(9.5%/12,37,30*12,-65000)/(9.5%/12)

Note that 9.5%/12 is the interest rate per period, 37 is the period for which you want to know your balance, 30*12 is total number of payment periods, and -65,000 is the present balance of the loan.

This formula returns the value of $63,674.26.

Example 2: Annual Payments
To find the balance of a $65,000 loan after 3 payments (3 years), when the rate of the loan is 9.5 percent per year, and payments are made yearly over a period of 30 years, calculate the IPMT of the loan for the next payment period and divide it by the computed interest rate, as in the following example:

=IPMT(9.5%,4,30,-65000)/9.5%

This formula returns a value of $63,569.61. In this example, there is no need to divide the rate and multiply the years by 12, because the number of payments per year is 1.

Additional query words: XL2000 xl2002 xl97 xl98 xl2001

Keywords: kbhowto KB214091

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