The following examples demonstrate the use of the IPMT function to find the balance of a loan using the following formula
=IPMT(rate,per,nper,PV)/rate
where
rate is the interest per payment period,
per is the period for which you want to find the balance,
nper is the total number of payment periods, and
PV is the present value of the loan.
Example 1: Monthly Payments
To find the balance of a $65,000 loan after 36 payments (3 years), when the rate of the loan is 9.5 percent per year, and payments are made monthly over a period of 30 years, calculate the interest payment (IPMT) of the loan for the next payment period and divide it by the computed interest rate, as in the following example.
In cell A1 of an Excel worksheet, enter:
=IPMT(9.5%/12,37,30*12,-65000)/(9.5%/12)
Note that 9.5%/12 is the interest rate per period, 37 is the period for
which you want to know your balance, 30*12 is total number of payment
periods, and -65,000 is the present balance of the loan.
This formula returns the value of $63,674.26.
Example 2: Annual Payments
To find the balance of a $65,000 loan after 3 payments (3 years), when the rate of the loan is 9.5 percent per year, and payments are made yearly over a period of 30 years, calculate the IPMT of the loan for the next payment period and divide it by the computed interest rate, as in the following example:
=IPMT(9.5%,4,30,-65000)/9.5%
This formula returns a value of $63,569.61. In this example, there
is no need to divide the rate and multiply the years by 12, because
the number of payments per year is 1.