Excel is a great tool for organizing your personal finances for so many reasons. It allows you to store facts about your monthly payments, make calculations about your household budget, and even conduct your finances.
An way to use Excel is to accomplish what-if scenarios when facing a major financial decision. One such decision for which Excel is commonly used is to frame out the would-be mortgage payments for separate mortgage loan scenarios you are considering.
Calculate Mortgage Interest
As you shop for separate loan offers from separate lenders, you will want to speedily and positively decree the monthly payment amounts for each. And, knowing your payments allows you to frame out which combination of three leading variables (mortgage period, interest rate, and loan amount) that will allow you to be able to best afford your mortgage.
If you are seeing for an Excel method to calculate mortgage payments, here is how to set up a quick calculation:
1. Write down the three relevant variables: The variables that matter in this calculation are interest rate, mortgage period (expressed in years), and loan amount.
2. Type the Pmt() method into a free cell in your Excel spreadsheet: Here's how: let's assume you are inspecting a 5% interest rate, 30-year loan period, and a loan whole of 0,000. Here is the method you would type into Excel:
=Pmt(5%/12,30*12,100000)
(The exact result in this case is: 6.82)
Note that your result will be expressed as a negative number, since this is the whole you will owe each month. If you are more comfortable viewing the result as a unavoidable number, just type the method like this:
=Abs(Pmt(5%/12,30*12,100000))
3. Collate separate mortgage scenarios by copying the method down or across many cells: To Collate many scenarios, just copy this method into many cells and enter separate numbers for the three variables mentioned above.
As you get the hang of this, you can also generate a uncomplicated table with separate combinations the three variables (viz., home value, interest rate, and mortgage period). Then, you can substitute the actual numbers in the Pmt() method (above) with cell references that point to each row in the table that represents a separate combination of these variables. This will make it easier for you to speedily Collate which combination yields which monthly payment.
Excel method to presume Mortgage Payments - A Quick Calculation method Calculate Mortgage Interest
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