Question:
The PMT function in MS Excel is used to:
The PMT function in MS Excel is used to:
Show Hint
Common Financial Functions in Excel:
- PMT \(\Rightarrow\) Periodic payment amount
- PV \(\Rightarrow\) Present value
- FV \(\Rightarrow\) Future value
- RATE \(\Rightarrow\) Interest rate per period
- NPER \(\Rightarrow\) Number of periods
- IPMT \(\Rightarrow\) Interest portion of a payment
- PPMT \(\Rightarrow\) Principal portion of a payment
Updated On: Mar 9, 2026
- Calculate the total interest on a loan.
- Calculate the periodic payment for a loan or investment.
- Calculate the future value of an investment.
- Calculate the present value of a series of payments.
Show Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
We need to identify the correct purpose of the PMT function in MS Excel.
Step 1: Understand the PMT function.
The PMT function in Excel calculates the payment for a loan based on constant payments and a constant interest rate. It returns the periodic payment amount (principal + interest) for an investment or loan.
Step 2: Syntax of PMT function.
\[ \text{PMT(rate, nper, pv, [fv], [type])} \] Where:
Step 1: Understand the PMT function.
The PMT function in Excel calculates the payment for a loan based on constant payments and a constant interest rate. It returns the periodic payment amount (principal + interest) for an investment or loan.
Step 2: Syntax of PMT function.
\[ \text{PMT(rate, nper, pv, [fv], [type])} \] Where:
- rate: Interest rate per period
- nper: Total number of payment periods
- pv: Present value (principal amount)
- fv: Future value (optional, default 0)
- type: When payments are due (0 = end of period, 1 = beginning)
- (A) Calculate the total interest on a loan:
- Total interest is calculated using other methods or functions like CUMIPMT, not PMT.
- PMT gives the periodic payment amount, which includes both principal and interest.
- (B) Calculate the periodic payment for a loan or investment:
- ✓ Correct. PMT returns the fixed periodic payment amount.
- (C) Calculate the future value of an investment:
- Future value is calculated using the FV function, not PMT.
- (D) Calculate the present value of a series of payments:
- Present value is calculated using the PV function, not PMT.
Was this answer helpful?
0
0
Top CBSE CLASS XII Accountancy Questions
From the following Balance Sheet of Hira Ltd. as at 31st March, 2023, prepare Comparative Balance Sheet:
- On 1st May, 2023, Amrit Ltd. issued 10,000, 10% debentures of ₹100 each at a premium of 10%, redeemable at a premium of 10%. Loss on issue of debentures will be:
- Gupta and Sharma are partners in a firm sharing profit in the ratio of 4:1. They admitted Preeti as a new partner for \( \frac{1}{4} \) share in the profits, which she acquired wholly from Gupta. The new profit sharing ratio of Gupta, Sharma, and Preeti will be:
- On the dissolution of a partnership firm, there were debtors of ₹34,000. Debtors of ₹1,000 became bad, and 60% was realized from the remaining debtors. Which account will be debited and by how much amount on the realization from debtors?
- If vendors are issued fully paid shares of ₹1,25,000 in purchase consideration of net assets of ₹1,50,000, the balance of ₹25,000 will be credited to:
View More Questions
Top CBSE CLASS XII Computerised Accounting Questions
- Computerised Accounting System rests on Five Pillars: Data, People, Procedure and _____, _____.
Identify the blank pillars from the following: Which of the following is not a limitation of Computerised Accounting System?
- MS Excel considers which of the following group of mathematical operations to be of equal importance?
- How is navigation conducted from first to last cell in a cluster of data in a column by skipping all the cells in between?
- Individual values represented by bars, columns, lines, pie or various forms plotted on a chart are known as:
View More Questions
Top CBSE CLASS XII Questions
- 2, b, c are in A.P. and the range of determinant $\begin{vmatrix}1&1&1\\ 2&b&c\\ 4&b^{2}&c^{2}\end{vmatrix}$ is [2, 16]. Then find range of c is
- A boy of mass 50 kg is standing at one end of a, boat of length 9 m and mass 400 kg. He runs to the other, end. The distance through which the centre of mass of the boat boy system moves is
- A capillary tube of radius r is dipped inside a large vessel of water. The mass of water raised above water level is M. If the radius of capillary is doubled, the mass of water inside capillary will be
- A circular disc is rotating about its own axis. An external opposing torque 0.02 Nm is applied on the disc by which it comes rest in 5 seconds. The initial angular momentum of disc is
- A circular disc is rotating about its own axis at uniform angular velocity \(\omega.\) The disc is subjected to uniform angular retardation by which its angular velocity is decreased to \(\frac {\omega}{2}\) during 120 rotations. The number of rotations further made by it before coming to rest is
View More Questions