When I use the pmt formula for calculating loan payments I think the formula
is set up using the 365 accrual method, I need to know if there is a way to
calculate it using the 360 accrual method. I am new to this so excuse the
basic questions.....any help is GREATLY appreciated!
No. PMT() assumes equal periodic payments. If you express a monthly
rate (typically annual rate divided by 12) and monthly payments, PMT()
is effectively assuming 30 days per month and 360 days per year -- the
so-called 30/360 method.
If you want more help, it would be useful for us to know the initial
loan amount, the term of the loan, the frequency of payment, and the
annual interest rate. It might also be useful to know your
jurisdiction and type of loan -- especially if you are talking about a
Canadian mortgage. Finally, it would also be useful for you to show
us your computation and why you concluded that PMT() is using the
actual/365 method, if that is what you meant by "365 accrual method".
That is, what is different from you expectation, and how do you know
PMT() is wrong rather than your expectation.
