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IPMT

The IPMT function in Google Sheets is a powerful tool to calculate the payment on interest for an investment based on constant-amount periodic payments and a constant interest rate. Whether you're analyzing mortgage payments, loan interest, or investment returns, the IPMT function simplifies the task. Dive into our comprehensive guide to master its application.

Function Syntax and Parameters

Syntax: IPMT(rate, period, number_of_periods, present_value, [future_value], [end_or_beginning])

Parameters:

  • rate: The interest rate for the investment.
  • period: The period for which you want to calculate the interest payment.
  • number_of_periods: The total number of payment periods.
  • present_value: The present value or principal amount of the investment.
  • future_value (optional): The future value or final amount to be achieved.
  • end_or_beginning (optional): Determines whether the payment is made at the beginning or end of each period.

Step-by-Step Tutorial

  1. Calculating the interest payment for a specific period:

    • Example: =IPMT(0.05, 2, 12, 10000)
    • Result: The formula will calculate the interest payment for period 2 of a 12-period investment with a principal amount of $10,000 and an interest rate of 5%.

  2. Calculating the total interest paid for the entire investment:

    • Example: =SUMIPMT(0.05, 1, 12, 10000)
    • Result: The formula will calculate the total interest paid for a 12-period investment with a principal amount of $10,000 and an interest rate of 5%.

Use Cases and Scenarios

  1. Mortgage Analysis: Determine the interest payment for a specific month of a mortgage.
  2. Loan Repayment: Calculate the interest paid on a loan for a certain period.
  3. Investment Analysis: Evaluate the interest earned on an investment over a specific time period.

Related Functions

  • PPMT: Calculates the payment on the principal for an investment based on constant-amount periodic payments and a constant interest rate.
  • NPER: Calculates the number of payment periods for an investment based on constant-amount periodic payments and a constant interest rate.

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