Hi! So it turns out we are adults now and this means a bunch of life things, ranging from flirting with child-bearing to taking out mortgages and the like. Whew 😅 . I still cannot believe humans woke up one day and chose labour.
This week's YouTube video
Let me show you how to calculate monthly loan payments in Excel/Google Sheets.
PMT function
To calculate loan payments, you can use the PMT function in Google Sheets/Excel. Here is an illustration of the entire process before I break it down
Was that image clear? Seriously, was it? Please let me know in the comments. I am experimenting with new ways to teach some of these concepts.
Here is a step by step breakdown using Scribe
🛑 : I am testing the use of Scribe in this format for these instructional posts, so let me know if it works for you in the comments, please.
Important to note
💡: This method assumes the loan is paid monthly in a year. Therefore the rate must be divided by 12.
💡: The loan amount/principal is a negative value because the money is coming out of one's pocket 😔 . If you leave it as a positive, the monthly payment will be negative. Can't stop reggae 😢 .
Conclusion
The PMT function can help you calculate simple loan payments. This works for the money-lender industry in Ug and such private arrangements. Larger loan schemes may incorporate several other components such as insurance, but that is beyond the purview of this 100 subscriber blog (for now 😃 ).
May you be the lender and not the borrower.
Have a good week!
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