*PROVIDING ACCURATE, RELIABLE AND STRAIGHT TO THE POINT KNOWLEDGE ABOUT DIFFERENT IT TOOLS EXPLAINED WITH PRACTICAL EXAMPLES*

#### CONTENTS

# EXCEL FUNCTIONS-CUMIPMT

### INTRODUCTION

* In our lives, we always come through ups and downs mentally, physically and financially too. *

*When it comes to the finances, we might need to apply for a loan. The loan is an amount burrowed from any financial institution on a fixed rate of interest and for a fixed term . We pay the emi at regular intervals.*

*The function which we are going to discuss helps us find out the cumulative interest to be paid in a certain period of time. The function is CUMIPMT FUNCTION IN EXCEL.*

*CUMIPMT function comes under the FINANCIAL FUNCTIONS category in Excel.*

*CUMIPMT re**turns the cumulative interest paid on a loan between a starting period and ending period.*

## PURPOSE OF CUMIPMT IN EXCEL

*CUMIPMT returns the cumulative (Total interest accumulated) between a starting and ending date.*

*When we have taken a loan , the interest keeps on accumulating. With the help of this function we find out the accumulated interest on the particular value.*

## PREREQUISITES TO LEARN CUMIPMT

THERE ARE A FEW PREREQUISITES WHICH WILL ENABLE YOU TO UNDERSTAND THIS FUNCTION IN A BETTER WAY.

- Basic understanding of how to use a formula or function.
- Basic understanding of rows and columns in Excel.
- Some information about the financial terms is an advantage for the use of such formulas.
- Of course, Excel software.

## SYNTAX: CUMIPMT FUNCTION

**The Syntax for the function is **

**=CUMIPMT**(**INTEREST RATE, PERIOD OF PAYMENT, CURRENT VALUE, STARTING PERIOD, ENDING PERIOD****, TYPE)**

**INTEREST RATE**is the rate of interest of the loan. [Rate needs to be divided as per the number of payments]

**PERIOD OF PAYMENT**is the total period of the payment for which the payment will be done.

**CURRENT VALUE**is the current principle value.

**STARTING PERIOD**is the number showing the period of calculation of interest. It starts with 1.

**ENDING PERIOD**is the number showing the last period of calculation.

**TYPE**is the type determining the time of payment.

**0 Payment at the end of period**

**1**Payment at the starting of the period.

## EXAMPLE:CUMIPMT IN EXCEL

### DATA SAMPLE

Let us try an example for the calculating the interest for a particular period.

Suppose we have the loan of 100000 dollars.

We took the loan for one year and will be paying monthly.

Rate of interest is 10% per annum.

Let us calculate the cumulated interest for the complete period.

Let us finalize the arguments for our formula

INTEREST RATE =10/12% as monthly payment so interest rate also converted to monthly.

NUMBER OF PAYMENT PERIODS 12 as payment is monthly for one year.

CURRENT VALUE is 100000 dollars

STARTING PERIOD is 1

LAST PERIOD is 12

TYPE is 0

### STEPS TO USE COUPPCD

=CUMIPMT(J12,J13,J14,J15,J16,0)

As we paid the interest monthly, the rate of interest was divided by 12.

The result comes out to be 5499.06 which will be the cumulative interest for the 12 months.

## CONFUSION CLARIFICATIONS

### CUMULATIVE INTEREST