EXCEL FUNCTIONS-CUMPRINC

INTRODUCTION

 CUMPRINC function comes under the FINANCIAL FUNCTIONS category in Excel.

CUMPRINC returns the cumulative principal paid on a loan between two dates. (over a period).

PURPOSE OF CUMPRINC IN EXCEL

CUMPRINC returns the cumulative principal paid on a loan between two dates.

PREREQUISITES TO LEARN CUMPRINC

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.

Helpful links for the prerequisites mentioned aboveWhat Excel does? How to use formula in Excel?

SYNTAX: CUMPRINC FUNCTION

The Syntax for the function is

=CUMPRINC(RATE, NUMBER OF PAYMENT PERIOD, PRESENT VALUE,START PERIOD,END PERIOD, TYPE)

RATE  Interest Rate (loan interest rate).

NUMBER OF PAYMENT PERIOD  Number of payment period.(e.g. 20 years,30 years)

PRESENT VALUE   Current value of principal.

START PERIOD   FIRST Period for calculation. It starts from 1.

END PERIOD   LAST Period of calculation.

TYPE Timing of payment

TypeTiming
0 (zero)Payment at the end of the period
1Payment at the beginning of the period

EXAMPLE:CUMPRINC IN EXCEL

DATA SAMPLE

The settlement date for the example is 19.01.2019

Maturity date is 1.09.2019

Freq of payout is 2

and basis is 1.

EXCEL CUMPRINC FUNCTION EXAMPLE

STEPS TO USE CUMPRINC

The data is put in the cells from G7 TO G12.For the resultwe put the formula in G16 as

=CUMPRINC(H7/12,H8*12,H9,H10,H11,H12)

The result comes out to be -795.82 which is the paid principal in the first month.