Excel 2007 : loan calculator question

[kentnash]

i need a formula to help me calculate a loan amount. I have the payment, the interest rate and the amortization period and i want to calculate the total loan amount. Basically, i am trying to work backwards from the PMT formula but i don't know the formula i should use. Any direction on this would be great.

Thanks.

[alansidman]

Try using the FV function (Future Value).

Alan

[MoneyMaker]

Try using the FV function (Future Value).

Alan

Alan

Loans have a future value of ZERO
The OP requires use of PV formula that represents the principal of the loan

Thus it would be
=PV(RATE, NPER, PMT, FV, TYPE)
RATE is the periodic rate thus if an APR of 5% with monthly payments the RATE would be 5%/12
NPER is the number of periods thus if there are 30 years in loan life with monthly payments then NPER would be 30*12
PMT would be the monthly loan repayment and is a negative amount
FV represents the final value or salvage value and for loans its ZERO unless there is a balloon payment
TYPE is 0 for end of month payments or you can omit it

Do keep in view that in Excel the interest rate is assumed to be compounded discretely as in per period compounding, if you require TVM calculations with continuous compounding then may you should try tadPV rather than PV function