The image below shows the annual capital amount to pay in the last or 5 th year. Total Period (F6) is also 5 as our total period is 5 years. And the Pr or the period for which we want to find the interest is now 5 as we are calculating the capital amount for the last or 5 th year. We are calculating the amount for a year. As we can see, we do not have to divide the annual interest rate by 12.At the start of the loan you pay mostly interest and a little capital, but by the end of the term, you pay a little interest and mostly capital.įor each period of the loan, you can calculate the interest amount by using the IPMT function.Ĭalculates the interest payment for a given period like a specific month or year. Find Out Interest Payment On a Loan for Specific Month or YearĪlthough monthly or yearly repayment amounts over the loan term will be the same, the proportion of interest and capital you repay each period varies over the term. Read More: How to Calculate Interest Rate on a Loan in Excel (2 Criteria)Ģ. The image below shows the fixed annual repayment amount. And the Npr or the total number of payments is now 5 as we have 5 years to pay off the loan.
