CUMIPMT is useful for financial analysis, particularly in scenarios involving loans and investments.
You want to find out the total interest you would pay over the full term of the loan.
This is the total interest paid over the full term of the loan.
Notice that the CUMIPMT function in Excel returns a negative value because it represents an outflow of money.
If you need a positive value, it’s possible for you to wrap the formula in theABS function.
More typically, the inputs will come from cell references.
We do this so that the formula will automatically adapt to a different number of compounding periods per year.
Also, notice that the monthly payment isnotan input to CUMIPMT.
To calculate a payment for a loan you’re free to use thePMT function.
The RATE function calculates by iteration.
