The Excel **PPMT** function is a *Financial* formula that calculates and returns the principal amount of the payment of a loan, based on constant payments and interest rate. In this guide, we’re going to show you how to use the **PPMT **function and also go over some tips and error handling methods.

## Supported versions

- All Excel versions

## PPMT Function Syntax

## Arguments

rate |
The interest rate for the loan. |

per |
The number of payment periods. |

nper |
The total number of payments for the loan. |

pv |
The present value, or total value of all loan payments today. |

[fv] |
Optional. The future value, or a cash balance you want after the last payment is made. The default value is 0 (zero). |

[type] |
0 = end of the period. (Default) 1 = beginning of the period. |

## Examples

### Without future value and due date type

The **PPMT** function has 4 required arguments: **rate, per, nper** and **pv**. Using these arguments, you can calculate the principal portion of the payment amount for a specified period (**per**). The function assumes payments are made at the end of each period, and the loan is to be paid in full.

For example, the following formula calculates the principal amount for the *third* payment for a loan of $100,000, to be paid over 36 months. at an 5% annual interest rate.

### With future value and due date type

You can specify a target cash balance for after the last payment is made, and if payments are to be made at the beginning or the end of each period.

The following formula is the extended version of the first example. It calculates the principal amount for the same period with same interest. The difference is here is that $50,000 is left after last payment and payments are made at the start of each period.

## Tips

- If
**pv**is entered as a positive number, the calculated payment amount will be negative. This is because the money is “coming out of pocket”. If you’d like to show negative numbers instead, simply multiply everything with ‘-1’. - The loan payments returned by the function include principal and interest, but of course does not include any taxes, reserve payments, fees etc. one might want to consider.
- Rate and
**nper**units should be consistent. If**nper**is defined in months, subsequently an annual interest rate should be divided by 12. - Multiplying
*payment*value by**nper**returns the total amount paid. - Other related financial functions:

## Issues

- The
**PPMT**function returns the*#NUM!*error if**per**is negative or greater then**nper**.