IPMT Formula in Excel
Thursday, Jun 18
commerce curve online accounting course

How to Use the IPMT Formula in Excel

The IPMT formula returns the interest payment for a given period for an investment based on periodic, constant payments and a constant interest rate.

This is something you can use to calculate investments or also loans and it will return the interest payment for a specific period that you are trying to find. You can also create a loan amortization schedule out of the IMPT formula to help you with it.


Formula Explanation

  • Rate (required): The interest rate per period
  • Per (required): The period number for which you want to find the interest.
  • Nper (required): The total number of payment periods in the annuity.
  • Pv (required): The present value, or the lump-sum amount that a series of future payments is worth right now. Also, this is the loan amount.
  • Fv (optional): The future value or a cash balance after the last payment is made. If fv is omitted, it is assumed to be 0
  • Type (optional): The number 0 (zero) or 1 and indicates when payments are due. 0 (zero) for when “at the end of the period” and 1 (one) for “at the beginning of the period”


On January 1, 2020, Davidson and Co. acquired equipment through a loan for $1,000,000 payable. The loan has different loan options available (A, B, C below) which vary in interest rate (5% to 10%) and length.

Davidson & Co. would like to know what the interest payment would be in the 12th month of the first year.


We can use the IPMT formula to determine the amount of interest payment in the 12th month under each loan option.

Formula Implementation:


  • Alternatively, we would create a loan amortization schedule if we wanted to build this out further.
  • Now we know how to use Excel to calculate the interest payments using the IPMT formula for a loan or investment.

I hope that helps. Please leave a comment below with any questions or suggestions. For more in-depth Excel training, checkout our Ultimate Excel Training Course here. Thank you!



Learn 10 great Excel techniques that will wow your boss and make your co-workers say, “how did you do that??”
Plus weekly updates to help you learn Excel.

Download the eBook

Contact Us

Please reach out to us with questions and comments using the form.
Commerce Curve.

1 + 4 =