Calculate Student Loan Repayment
I want to estimate my monthly payment for a $40,000 student loan with a 10-year term and 4.5% interest rate.
=-PMT(B3/12, B4*12, B2) How it works: The PMT function calculates the payment for a loan based on constant payments and a constant interest rate. For student loans, payments are typically monthly, so the annual interest rate (B3) must be divided by 12 to get the monthly rate, and the loan term in years (B4) must be multiplied by 12 to get the total number of monthly payments. B2 represents the present value (PV) or the total amount of the loan.
Data Setup
| Loan Detail | Value |
|---|---|
| Loan Amount (PV) | 40000 |
| Annual Interest Rate | 0.045 |
| Loan Term (Years) | 10 |
Step-by-Step Guide
Enter the loan amount ($40,000) into cell B2.
Enter the annual interest rate (4.5% or 0.045) into cell B3.
Enter the loan term in years (10) into cell B4.
In a new cell, type the PMT formula: `=-PMT(B3/12, B4*12, B2)`. The negative sign is used to display the payment as a positive value, as PMT typically returns a negative value for payments.
Press Enter to see your estimated monthly loan payment.