# Tutoring financial math, loan payments are calculated. The tutor mentions how Excel handles payments at period beginning, as opposed to period end.

In my post of October 5, I show how to find the monthly payment of a loan using Excel. If not stated, the payment is assumed to be at month-end.

What if a loan has the payment at the beginning of the month?

Example:

**Calculate the monthly payment on a 25-year, $100,000 loan at 4% compounded monthly, if the payment is made at the beginning of each month.**

Solution:

=pmt(4%/12, 300, 100000,0,1)

Hopefully you receive the answer -526.08. (Negative means paid out as opposed to received.)

The fourth and fifth arguments aren’t present in my earlier post. The fourth is for the loan’s future value (assumed 0 if not specified). The fifth is for loan type: 0 for month-end payment, but 1 for beginning of month. The fifth is assumed 0 (month-end) unless given.

The parallel situation with annuities is *annuity due*, where payments are *received* at month beginning. More about that here.

Jack of Oracle Tutoring by Jack and Diane, Campbell River, BC.