Description
The Excel ISPMT function calculates the interest paid, during a specific period of a loan or investment.
The syntax of the function is :
ISPMT( rate, per, nper, pv )
Where the arguments are as follows:
Cash Flow Convention :
Note that, in line with the general cash flow convention, outgoing payments are represented by negative numbers and incoming payments are represented by positive numbers. This is seen in the examples below.
Excel Ispmt Function Example
The following spreadsheet shows the Excel Ispmt function used to calculate interest paid, during months 1 and 2, of a loan of $50,000 which is to be paid off over 5 years. Interest is charged at a rate of 5% per year.
The spreadsheet on the left shows the format of the functions, and the spreadsheet on the right shows the results.
Ispmt Function Error
If you get an error from the Excel Ispmt function, this is likely to be the #VALUE! error:
Common Error
Also, the following problem is encountered by some users:
Common Problem
The result from the Excel Ispmt function is much higher or much lower than expected.
Possible Reason
Many users, when calculating monthly or quarterly payments, forget to convert the interest rate or the number of periods to months or quarters.
Solve this problem by ensuring that the rate and the nper arguments are expressed in the correct units. i.e. :
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