Financial function in Excel. PMT, PPMT, IPMT, PV, FV, NPER Function.

Summary

This video tutorial offers a comprehensive guide to financial functions in Microsoft Excel, focusing on PMT, IPMT, and PV functions. It demonstrates how to calculate weekly, monthly, quarterly, and annual installments for loan amounts using these functions. The presenter provides step-by-step instructions, explaining each argument required for the functions and how to format percentages and values correctly. Additionally, the video touches on calculating the future value of investments and how to adjust payments to achieve desired outcomes, making it a valuable resource for those in the banking sector or anyone needing to perform financial calculations in Excel.

Takeaways

• 😀 The video is a tutorial on using financial functions in Microsoft Excel, focusing on calculating loan payments and understanding financial concepts.
• 📊 It explains how to use the PMT function in Excel to calculate periodic payments on a loan, including weekly, monthly, quarterly, and annually.
• 💼 The presenter demonstrates how to input the interest rate, number of periods, present value, future value, and type of payment period (beginning or end) into the PMT function.
• 📈 The video covers the concept of converting annual interest rates to periodic rates by dividing the annual rate by the number of periods per year (e.g., 52 for weeks, 12 for months).
• 🔢 It shows how to adjust the PMT function for different types of payments, such as monthly payments by dividing the annual rate by 12 and multiplying the number of periods by 12.
• 📋 The tutorial includes a step-by-step guide on entering values into Excel cells and using formulas to calculate financial values like present value, future value, and loan payments.
• 💡 The presenter provides a trick for calculating payments when the time value is given in months by multiplying the number of months by the monthly payment.
• 📉 The video explains how to use the IPMT function to calculate the interest portion of a loan payment for a given period.
• 💻 It also touches on the use of relative and absolute cell references in Excel formulas to ensure accurate calculations across multiple cells.
• 🌐 The tutorial is aimed at individuals working in the banking sector or finance companies, emphasizing the importance of Excel skills in these fields.

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