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Home Questions UGFQBFWN9B
Target Exam

CUET

Subject

-- Accountancy Part C

Chapter

Use of Spreadsheet in Business Applications

Question:

For which of the following purpose the function PMT is used in excel?

Options:

Payroll Calculation

Fixed Asset Accounting

Loan Repayment Schedule

Depreciation

Correct Answer:

Loan Repayment Schedule

Explanation:

The correct answer is option 3- Loan Repayment Schedule.

The function PMT is used to compute the loan repayment schedule.

Computation of repayment installments is an iterative process. The Excel’s built-in function, PMT can be used to compute monthly instalments of repayment of loan. The parameters of the function PMT are as follows:

Parameter Explanation
Rate Interest rate per period for the loan
Nper Total number of payments for the loan. Its unit (e.g. year)
should match with the unit of the interest rate.
Pv Present value, i.e. the loan amount
Fv Future value, which is taken as 0, is the balance at the
end of the loan period
Type Whether payment is made at the beginning (value=1) or
at the end (value=0) of the period

 

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