To calculate the monthly payment for the loan using the PMT function in Excel with defined names for the arguments, follow these steps:
1. Define the names for the rate, nper, and pv arguments:
- Go to Formulas > Define Name.
- Create a new name for the rate argument, e.g., MonthlyRate, and divide the Annual Interest Rate by 12.
- Create a new name for the nper argument, e.g., TotalPeriods, and multiply the Loan Term by 12.
- Create a new name for the pv argument, e.g., PresentValue, and use the Loan Amount as the present value.
2. Enter the formula in cell F5:
- Start by typing "=-PMT(" in cell F5 (without quotes).
- Enter MonthlyRate for the rate argument, TotalPeriods for the nper argument, and PresentValue for the pv argument.
- Close the parentheses and press Enter to calculate the monthly payment for the loan.
Your formula in cell F5 should look something like this:
=-PMT(MonthlyRate, TotalPeriods, PresentValue)
After entering the formula, Excel will calculate and display the monthly payment amount for the loan to fund the law firm's transition to the cloud.
How to do this in excel 4. Nadia needs to calculate the monthly payment for the loan to fund the law firm's transition to the cloud. In cell F5, enter a formula using the PMT function. Insert a negative sign (-) before the function in the formula to display the result as a positive amount. Use defined names for the rate, nper, and pv arguments as follows: rate argument: Divide the Rate by 12 to use the monthly interest rate. nper argument: Multiply the Term by 12 to specify the number of months as the
periods.
pv argument: Use the Loan_Amount as the present value of the loan.
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