You push enter and you’ll see you get the same interest amount as if you had done an amortization table, What’ll come up is it’ll give you an answer, and if you compare that 20233, to this answer here where its exactly the same 20233, you’ll see you’ve got the correct interest amount,Īnd using this function you can maybe get the full interest charged, by using a full 5 year period, The present value, is the outstanding amount on the loan, which is the 100000,Īnd this is the start period, when do you want to know where the interest payments start, and because we are looking for years 1 and 2 were going to start, in year 1Īnd don’t forget if you go a little bit lower down, you need to tell it what type of payment method this is, is the payment happening at the end of the year, or the beginning of the year, and 0 indicates the end of year The number of periods is the total number of payment periods, which in this case is 5, So it asks for the rate, in this case is 11%, If you wanted to work out the interest payments over the years 1 and 2, you can do the followingĪnd find CUMIPMT which stands for Cumulative Interest PaymentĪnd this will pop up, what it asks for is a bit of information about the loan, However, in Excel there’s and easier way to do that, using the Cumulative Interest Payment function and the Cumulative Principal Payment function. Generating a repayment amount, and we have developed an amortization table, so that we can work out what the interest charge is each year, and what the actual capital repayment is each year. In this example we have a loan outstanding of 100000, with an interest rate of 11%, over a period of 5 years. Please note that you need to have the Analysis Toolpack loaded in order for these functions to work. In this segment you will learn how to activate these functions and use these functions instead of building amortization tables. The CUMIPMT and CUMPRINC functions allow you to calculate the net interest paid and principal paid over any particular period without having to generate amortization tables
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