Aug 10th 2012
14
Microsoft Excel is an ideal tool for calculating the cost of borrowing money, but are you doing so in the most efficient manner? In this article, I'll describe how you can use the CUMIPMT function to calculate interest expense for a loan, whether for a month, a year, or the length of the loan  all within a single worksheet cell. I'll also show you how to add an amortization schedule to any workbook with just a couple of mouse clicks.
Before I describe the CUMIPMT function, let's first take a look at the PMT function, which calculates the payment amount for a loan. PMT has 3 required and 2 optional arguments:
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thanks for this advice ...now no more salute to any banker......
Thank you! Very helpful.
thanks :)
Very clear. Thanks a lot. I am able to create my own sheet now
Is the result the present value of the interest cost over the life of the loan? Or is it the future value (at the end of the loan) of all of the interest accumulated over the life of the loan? Do I need to do an additional adjustment find the present value? Thanks for this explanation.
Jason,
Great question! Yes, CUMIPMT does return the present value of the interest earned over the life of the loan. To prove it out, rightclick on any worksheet in Excel, choose Insert, and then doubleclick on Loan Amortization in the Spreadsheet Solutions tab. This will add an amortization table to your workbook, and you can run the same numbers as you used with CUMIPMT to see that the results are the same.
David
What about if the loan with the interest will be due on the date given and the borrower does not paid for the remaining amount on that date, what would be the formula to get the penalty for the existing days/month?
I WANT THE SAME FOR CALCULATION HOW TO CALCULATE
Details
of Projected Interest Expense
Actual
Projected
Month
Week 1
Week 2
Week 3
Week 4
Week 1
Week 2
Week 3
Week 4
Particulars
Oct14
Nov14
Nov14
Nov14
Nov14
Dec14
Dec14
Dec14
Dec14
Interest expense(Gross)
Other borrowing costs
Total









Less: Interest capitalised
Interest Expense(Net)









if I know the cost(3,915) and the principal (19,800) what is the actual interest for 2.5 years?
To solve this I'd ideally need the interest rate and the term of the loan, but I can figure out with just one of those pieces of information. If you don't have either then I can't give you an accurate response.
What about if the loan with the interest will be due on date given and the borrower does not paid for the remaining amount on that date, what would be the formula to get the penalty for the existing days/month?
In that case the borrower isn't paying down principal any more, they're simply accruing interest on the unpaid balance. One approach would be to take the interest rate and divide it by 365. Multiply that figure by the unpaid balance times the number of days that the loan is past due. So on an unpaid balance of $10,000 at 4.5% interest of $55.48 would be due when the balance is 45 days old. There are lots of different ways to write a loan contract, so make sure you review the promissory note to determine treatment of missed payments or balloon balances.
How can a balloon payment be included in CUMIPMT calculation? I am looking for the total interest amount for loan with regular monthly payments and balloon at the end. Thanks so much for any advice.
Good Afternoon,
Is it possible to show how this can be done using rule 78 to calculate the inst amount?