How to Calculate an Interest Payment Using Microsoft Excel
When you are considering making an investment, it is very helpful to calculate the interest payments before the transaction is complete. This information helps you decide whether your considered investment is a good financial choice. Using Microsoft Excel will allow you to do this calculation quickly and easily.
Other People Are Reading
Instructions
-
-
1
Gather the information you need. Know the interest rate you will earn, the period, the term of the investment, the number of payments you will receive and the value of the payments.
-
2
Create a Microsoft Excel spreadsheet. Include cells with all of the above information. Key in the following headings: "Interest Rate" in cell A5, "Period" in cell B5, "Term" (number of months) in cell C5, "Number of Payments" in cell D5, "Value" in cell E5 and "Interest Payment" in cell F5.
-
-
3
Use the information you gathered initially to enter the appropriate information in the cells immediately to the right of the cells where you entered the headings. For example, enter the interest rate of your loan into cell A6. Enter all the information and click your mouse in cell F6.
-
4
Enter the following formula in cell E6 to have the computer determine your Interest payments: =IPmt(A6/12,B5,D5,E5)
-
5
Understand what the formula means so you can use it correctly. =IPmt tells the computer to calculate the interest payment, A6/12 is the interest rate divided by 12 to find the monthly interest, D5 is the number of payments and E5 is the present value of the payments.
-
1
