Personal Investment & Financial Planning Q`s/Loan Payment


I am looking to make a personal loan. The total amount of the loan will be due in 5 months when the term expires. The annual rate will be 10%. What formula can I use in Excel to model the loan?



Hi Chris,

The formula you can use is the Future Value (FV) formula.  This will tell you the interest due after five months.   Here is what it looks like (assuming monthly compounding).

RATE   0.80%   Interest Rate - for each period      
NPER   5   Number of Periods - five months      
PMT   0   No payments - single repayment      
PV   10,000   Present Value - Assumed Amount of Loan       
Type   End of Period   Interest accrues at the end of each period principal repaid at end      
FV   ($10,404.73)   The amount paid to lender at the end of the term
    =FV(rate,nper,pmt,pv.type)   This is the formula that pops up if you type =FV in cell   
Check   1.0999   the check formula is (1.008)^12   confirms the monthly compounding interest rate equals 10% annually.

You can easily just use a calculator:  (.1 / 12)*5*10,000 = $416.67 interest due.  Pretty close.      

Hope this is helpful.  Good luck.

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John Guilford Kerr, CFP, CFA


I can answer questions related to personal financial planning, asset allocation, private equity investment analysis, fixed income, mutual fund, ETF, and stock questions, estate planning (basic), education planning, insurance planning, and business financial planning.


I have thirty-eight years of experience in finance, in the U.S. and internationally, for both public and private corporations. I have specialized in personal and small business financial planning and investment advisory services since 2005.------ - ten years commercial banking, New York, Paris, Houston, Charlotte, Atlanta---- - six years treasurer of a publicly traded health care company, Philadelphia----- - six years international project finance (Bechtel), San Francisco, Manila, London----- - five years head of international hotel development (Hyatt), Chicago---- - eleven years personal financial planning.----- Registered Investment Adviser, Hawaii---- FINRA General Securities Representative - Series 7---- FINRA Uniform Combined State Law - Series 66---- Resident Producer Insurance License, Hawaii-, Accident and Health or Sickness, Life, Variable Life and Variable Annuities

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