Name
CUMIPMT
Synopsis
CUMIPMT (an Analysis ToolPak function) is used to determine the total amount of interest that you will pay on a loan. You can determine the interest for the entire life of the loan or just for a specific time frame. For example, you may want to use this function to see how much interest you paid on your mortgage loan last year.
Rate Is by Period, Not by Annual Interest
Be careful about specifying the interest rate for the Rate argument. You must specify the rate used for each period, not the annual interest rate. For example, if there is a 10% interest rate charged annually for the loan and the payments are made monthly you need to indicate the amount of interest charged each month. That is determined by dividing the annual rate by the number of periods (months) in the year. For example, in Figure 12-4 we divided the annual interest rate of 8.5%, expressed as a decimal (0.085) by 12 to get a monthly interest rate of 0.0070833333 for each payment.
To Calculate
=CUMIPMT(Rate,Nper,PV,Start_Period,End_Period,Type)
The following arguments are required:
-
Rate Indicate the interest rate used to calculate the rate for each period. For example, if you make monthly payments and the interest rate is 12% you need to specify an interest rate of
0.01(0.12/12) as the rate for each month.-
Start_Period Since you can calculate the interest for the entire loan or a portion of the loan, you need to indicate the first loan period in order to calculate the interest. If you want ...
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