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## Excel ISPMT function

Using the IPMT function in Excel, you can easily figure out the interest payment for a given period of an investment based on periodic, constant payments and constant interest rate. However, to calculate the interest payment for a given period of a loan or investment with even principal payments, you need to use the ISPMT function in Excel. #### Function syntax and arguments

ISPMT(rate, per, nper, pv)

(1) Rate: Required. It’s the interest rate per period.
The interest rate must be consistent with the nper. For example, the annual rate of a loan is 6%, and you can convert it to periodic rate as follows:

• For semi-annual payments, you need to convert it to semi-annual interest rate: 3% (=6%/2);
• For quarterly payments, you need to convert it to quarterly interest rate: 1.5% (=6%/4);
• For monthly payments, you need to convert it to monthly interest rate: 0.5% (=6%/12).

(2) Per: Required. It’s the specified period that you want to figure out the interest for. The per value must be between 1 and nper.

(3) Nper: Required. It’s the total number of payment periods for the investment or loan.
For example, you have a 3-yearloan from your bank, and you can figure out the total number of payment periods as follows:

• For semi-annual payments, the total number of periods is 6 (=3*2);
• For quarterly payments, the total number of periods is 12 (=3*4);
• For monthly payments, the total number of periods is 36 (=3*12).

(4) Pv: Required. It’s the present value of an investment, or the total amount of money you get from a loan at present.
For the cash you pay out, please use it as negative numbers, for the cash you receive, please use it as positive numbers.

#### Return Value

Numerical value.

The ISPMT function returns the interest payment of the specified period of an investment or loan with even principal payments.

#### Usage notes

(1) Make sure the units of rate and nper are consistent.

(2) The ISPMT function counts periods beginning with zero, not with one.

#### Formula Example: Calculate interest of a period of a loan with even principal payments

Let’s say you borrowed \$6,000 from the bank with annual rate of 7.2%, and you make a monthly repayment schedule in which the principle payments are equal. And the repayment will start from January and last for 1 year. In this example, the rate should be converted to monthly rate as 7.2%/12 (C4/C6), the total number of payment periods is 1*12 (C5*C6), the loan amount is 6000, therefore you can calculate the interest payment of the first month with one of below formulas:

=ISPMT(7.2%/12, 0, 1*12, 6000)

=ISPMT(C4/C6,F4,C5*C6,C3)

For easily copying the formula to other cells with dragging the AutoFill handle, I convert the cell references to absolute except the reference of period:

=ISPMT(\$C\$4/\$C\$6,F4,\$C\$5*\$C\$6,\$C\$3)

Note: If you need to calculate quarterly or semi-annual interests of a loan with even principal payments, you can change the periods per year (in the Cell C6) to 4 (for quarterly interests) or 2 (for semi-annual interests).

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