PMT calculates a fully amortizing payment — every installment includes both interest accrued that period and a chunk of principal, so the balance reaches zero on the final payment. An interest-only payment covers just the period's interest and leaves principal untouched, meaning the full loan balance is still owed at the end of the interest-only window. Interest-only payments are lower, but the loan does not pay itself off; some future PMT-style amortization (or a balloon) must follow.

PMT returns the total constant payment for a fully amortizing loan. IPMT returns just the interest portion of a specific payment number (e.g., the interest in payment 12). PPMT returns just the principal portion of a specific payment. IPMT + PPMT for the same period always equals PMT. Use IPMT and PPMT when you need to build an amortization schedule, allocate interest for tax purposes, or report mortgage interest separately.

Most loans use end-of-period payments (an ordinary annuity), and that's the default for the PMT formula shown here. Some leases, rental agreements, and annuity-due investment products pay at the beginning of the period, which makes each payment slightly smaller because money is paid earlier and accrues less interest. In Excel, PMT's last argument (type) is 0 for end-of-period (default) or 1 for beginning-of-period.

FV is the balance you want left at the end. For a standard loan you want it fully paid off, so FV = 0 and the simpler PMT = (PV × r) / (1 − (1+r)^−n) applies. If you're saving toward a target (FV > 0, PV = 0), the formula flips to PMT = (FV × r) / ((1+r)^n − 1). If you have both a starting balance and a residual balloon, the full PMT formula handles both PV and FV simultaneously — the Excel function does this natively.

PMT assumes a constant periodic rate and equal time between payments. It breaks down on adjustable-rate or step-rate loans (the schedule has to be recalculated each rate change), on loans with skipped or graduated payments, and on instruments with embedded options like prepayment penalties or callable bonds. It also doesn't handle fees-financed-into-the-loan transparently — if the lender bakes points or origination fees into the principal, the PMT is right for the inflated balance but the borrower's effective cost (APR) is higher than the nominal rate suggests.

Yes — just match the periodic rate and number of periods to the payment frequency. For biweekly: r = annual rate / 26 and n = years × 26. For weekly: r = annual rate / 52 and n = years × 52. The result is the payment per period (per biweek or per week), not per month. Biweekly schedules also make 26 payments per year rather than the 24 implied by twice-monthly, which is why biweekly mortgages pay off faster than monthly ones at the same nominal rate.

Excel uses a cash-flow sign convention: money flowing out of your pocket is negative, money flowing in is positive. If you enter the loan amount (PV) as a positive number — the bank giving you cash — PMT is negative because you're paying it back. Enter PV as negative (-20000) and PMT comes back positive. Either is mathematically correct; pick whichever convention reads more naturally for your spreadsheet.