## How to Calculate Term Loan Formula Using in (IPMT) Excel

##
**Term loan** is
a monetary loan that is repaid in regular payments over a set period of
time. Term loans use a different technique. Each period, you pay the
amount of interest due plus a fixed amount for principle reduction. As a
consequence, your payments decrease over time.

IPMT
Function Formula Description is Returns the interest payment for a
given period for an investment based on periodic, constant payments and a
constant interest rate.

IPMT FUNCTION FORMULA SYNTAX is : -

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

The IPMT Function Formula syntax has the following arguments are :

**IPMT Function Formula is used to know the interest portion in the EMI of a particular instalment.**

Here the example for, the amount of the principle paid each period is equal to Rs.1,00,000 divided by 12 = 8333.33

Also notice that the total payment decreases each every month as the amount of interest decreases while the principle amount stays the same.

Calculating Term Loan Values With one exception, it's quite easy to calculate the values for a Term loan. lam use the following Following Formulas I show the values from the example above.

Loan amount of the : 100000

Interest Rate : .5% per Annual

Principle Payment : amount of the the Month 8333.33 per month).

Total number of loan payment Months : 12

Calculation the number of loan payments that we choose to calculate from the beginning of a loan. In the above example, this number could range from 1 to 12

**Using these abbreviations, here are the formulas for a term loan:**

**Here the Below Screenshot Image**

Sagar, thanks for the useful guide. I am side by side trying to practice this on my sheet. I never get the formulas correctly placed in the first time.

ReplyDeleteformula clearly mentioned and view the screen shot

DeletePrinciple Payment With Interest Formula : =100000/12+C9

Interest Formula : =IPMT(0.5%,A9,12,-E8)

Principle Amount Formula : =SUM(B9-C9)

Outstanding Amount Formula : =E8-D9

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DeleteMS Excel is not an easy application for a lot of students. This article is very helpful for a lot of struggling students. Thank you for sharing.

ReplyDeleteThanks for your comment

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