PPMT calculates just the principal portion of a specific loan payment — the counterpart to IPMT.
PPMT calculates the principal portion of one specific payment in a loan schedule — how much of that payment actually reduces the amount owed, as opposed to covering interest.
It is the natural pair to IPMT: every payment splits into interest (IPMT) and principal (PPMT), and the two always add up to the total fixed payment.
=PPMT(rate, per, nper, pv, [fv], [type])| Argument | Description |
|---|---|
| rate required | The interest rate per period. |
| per required | Which payment number to calculate. |
| nper required | The total number of payments. |
| pv required | The loan amount. |
| fv optional | The remaining balance after the last payment. Defaults to 0. |
| type optional | 0 = end of period (default), 1 = start. |
=PPMT(0.05/12,1,36,5000)On a $5,000 loan at 5% over 36 months, the first payment's principal portion is about -$129.02.
=IPMT(0.05/12,1,36,5000)+PPMT(0.05/12,1,36,5000)Should equal the fixed monthly payment from PMT(0.05/12,36,5000) — a useful sanity check when building amortization tables.
=PPMT(0.05/12,24,36,5000)By payment 24 of 36, more of the fixed payment goes to principal than it did at payment 1.
IPMT = interest portion. PPMT = principal portion. Easy to swap by mistake when building amortization schedules quickly.
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