The loan payment formula is used to calculate the payments on a loan. 5 12 0416 percent per month. Then in the cell next to Payment per month B5 for instance enter this formula PMT B2B4B5B10 press Enter key the monthly mortgage payments has been displayed.
Divide the 5 percent annual rate by 12 months and you get 0416 percent.
To calculate monthly mortgage payment you need to list some information and data as below screenshot shown. Because the monthly payments arent high enough to pay off the full loan the remaining loan balance is due as one large final payment known as the balloon payment at the end of the loan term. Its also possible to estimate a mortgage payment by hand. Then in the cell next to Payment per month B5 for instance enter this formula PMT B2B4B5B10 press Enter key the monthly mortgage payments has been displayed.