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PPMT

The PPMT function in Google Sheets calculates the payment on the principal of an investment based on constant-amount periodic payments and a constant interest rate. Use this function to analyze the principal payment amount for a given period in an investment or loan.

Function Syntax and Parameters

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

Parameters:

  • rate: The interest rate per period.
  • period: The payment period to calculate the principal payment for.
  • number_of_periods: The total number of payment periods.
  • present_value: The present value or the initial investment amount.
  • future_value: [Optional] The future value or the desired value after the last payment is made. Default is 0.
  • end_or_beginning: [Optional] The timing of payments. 0 or omitted indicates payments at the end of the period. 1 indicates payments at the beginning of the period.

Step-by-Step Tutorial

  1. Calculating principal payment for a specific period:

    Example: =PPMT(0.05, 3, 5, 1000)

    Result: The formula above calculates the principal payment for the third payment period in a loan with an interest rate of 5% per period, a total of 5 payment periods, and an initial investment of $1000.

Use Cases and Scenarios

  1. Mortgage Analysis: Determine the principal portion of a mortgage payment for a specific period.
  2. Loan Repayment Plan: Calculate the principal payments for a loan amortization schedule.
  3. Investment Analysis: Analyze the principal payment schedule for an investment with periodic contributions.

Related Functions

  • PMT: Calculate the payment amount for an investment based on constant payments and a constant interest rate.
  • IPMT: Calculate the interest payment for an investment based on constant-amount periodic payments and a constant interest rate.

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