MS Excel PMT Function

What is the syntax of the PMT function in MS Excel?

• =PMT(rate, pv, nper, [fv], [type])

• =PMT(rate, nper, [fv], [type], pv)

• =PMT(rate, nper, pv, [fv])

• =PMT(rate, nper, [fv], [type])

What are the arguments of the PMT function and how are they used?

• rate, period, and value

• rate, nper, and pv

• interest, time, and present

• annual rate, number of periods, and future value

What is the correct way to enter the PMT function in MS Excel?

• =PMT(rate, nper, pv)

• =AVERAGE(rate, nper, pv)

• =SUM(rate, nper, pv)

• =MAX(rate, nper, pv)

In the PMT function, what does the 'rate' argument represent?

• Number of periods

• Total loan amount

• Monthly payment amount

• Interest rate for each period

How is the 'nper' argument used in the PMT function?

• It represents the total number of payment periods in an investment.

• It is used to calculate the present value of the investment

• It represents the interest rate for the investment

• It is the amount of the periodic payment in the investment

What is the purpose of the 'pv' argument in the PMT function?

• To determine the future value

• To represent the present value of future payments

• To represent the payment frequency

• To calculate the total payment

Explain the significance of using the PMT function in financial analysis.

• It is used to find the average of a range of cells

• It is used to calculate the number of characters in a cell

• It helps to calculate the periodic payment for a loan or investment based on constant payments and a constant interest rate.

• It helps to determine the color of the cell based on the value

What are the units for the 'rate' argument in the PMT function?

• Monthly interest rate

• Annual interest rate

• Total loan amount

• Number of payments

How does the PMT function help in comparing different loan options?

• It calculates the monthly payment for each loan option

• It determines the interest rate for each loan option

• It calculates the total loan amount for each option

• It provides the credit score required for each loan option

What cell reference represents the rate in the following PMT function?
=PMT(B7, B8, B6)

• B7

• B8

• B6