If you're not familiar with the financial calculater and fancy on how a bank salesperson calculate your housing loan monthly payment in just few pressing on the calcualtor, you may actualy DIY through microsoft excel function.
PMT:
each repayment/instalment amount
Rate:
interest per period of a loan, e.g 5% p.a divide by # payment per year = 5%/12 = 0.00417
NPER:
total # of payment for full tenure, e.g. monthly payment for 30 years = 30x12 = 360
PV (Present Value):
Loan amount
FV (Furutre Value):
For housing loan, ZERO as fully paid up the loan when matured e.g 30 year later.
To find out how much monthly repayment you're paying for a $250,000 30-yrs loan at loan interest of 5% p.a interest? You may key in the formula in the Excel cell.
=PMT(0.00417,360,250000,0)
The answer should be deficit figure of $1,342.05 and this is your constant monthly repayment.
Of course, the function of PMT, PV, FV, NPER are extremely useful in other area such as calculating effective interest rate for regular savings, investment, inflation and your financial planning, etc.
Do spend some time to manage this function, it will be very helpful.
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