Multiple choice

The PMT () formula can be used to calculate the

  1. time difference between 2 times

  2. date difference between 2 dates

  3. monthly payment amount on a loan

  4. straight loan payment based on constant payments and constant interest rate
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The PMT function in Excel calculates the payment amount for a loan based on constant payments and a constant interest rate. It requires five parameters: rate, nper (number of periods), pv (present value/loan amount), and optionally fv (future value) and type (when payment is due). While option C mentions 'monthly payment,' option D provides the more complete and accurate description.

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