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William Rosener: Hello i'm Dr phil roesner and this instructional video you'll learn about the pmt function one with the Min Max and average functions using Google sheets.

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William Rosener: The pmt function calculates the periodic payments for an annuity investment, based on a constant payments and a constant interest rate.

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William Rosener: This function will give you a clear understanding of your payments long term the pmt function works in any long term payment situation, whether it's for 13 months or 30 years.

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William Rosener: A few examples of when you would use the pmt function include car loans mortgages and student loans.

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William Rosener: would start by taking a look what take a look at what you learn how to create this video and then we'll go ahead and walk through so imagine you've got a.

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William Rosener: golf course and approach shop here and you've got the various golf corn golf cart brands and here's the price and here's interest rate and he would be the monthly payments, the total purchase price and the total interest rates, so if I came along and choose one of these.

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William Rosener: In order to compute a new monthly payments, a new total purchase price and a new total interest and if I get high enough, maybe, let me change this my can see right now the highest one is this tomlin at 9000 I was to change this one to.

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William Rosener: 4000, then I can see coming on down here the highest price car would change, along with the average, but now that we want to do let's get started there.

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William Rosener: So i'll try and give you some of this and save a little time and they're still in the same area as you found the link to this video, you should also find some data, you could copy and paste to get started here.

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William Rosener: But the first thing we do is, I want to be computing monthly payments and what to do that for two years, the pmt function, secondly, the kind of type of here lot of times they come right up here and type.

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William Rosener: In type in the pmt and the first thing that this thing does is it takes an interest rate and that's right here in be five doing the trick here is.

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William Rosener: That 6% it's an annual interest rate and i'm trying to compute monthly payments, so I need to divide that by 12 So the first one is kind of the rate next one is the number of periods or the number of payments and I can see that information is in be sex.

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William Rosener: And then the final one is going to be.

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William Rosener: In this case, present value or the price that's going to be in be four.

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William Rosener: Okay, so.

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William Rosener: i'm buying this golf cart or $6,000 interest rate of 6% i'm spreading like payments out over 48 months of the pain hundred $52 every month there.

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William Rosener: Okay, so now let's go ahead and compute the total purchase price that's going to simply want to multiply these two numbers number of payments times the number monthly payments about some the number there.

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William Rosener: So to do that i'm going to come right up here and i'm going to take a look at what's in be sex.

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William Rosener: and multiply that in that's kind of that star shifted the eight by what's in the seven.

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William Rosener: And it should be given me 7321 Based on this information here, so now, what I want to do is compute the total price and what you're going to find is negative numbers in this case, then just.

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William Rosener: Like the pmt it's like a payment so it's gonna be negative, but in this case i'm going to take a look, and I want to take a look, what is the difference between.

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William Rosener: The total purchase price and the price, and to do that i'm gonna come right here and i'm going to take a look at the absolute value that we don't have given with a negative number there and take a look at what's in bh, which is the total purchase cost.

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William Rosener: Let me take that information.

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William Rosener: minus what's in before the price of the golf cart.

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William Rosener: Okay, and that would give me $826 once you've got these you can go ahead and do them individually or simply position your cursor on the film handle and you can try those out.

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William Rosener: In the I think the silicon okay next thing we're doing is such as some men Max the average if I take a look at, but only got a few numbers, I can quickly glance up here and go okay this yamaha is the least expensive.

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William Rosener: But sometimes if you got 100 200,000 entries it's kind of hard to find what is the lowest price or is the smallest to do that i'm just gonna use the inflection on the right up here that would take the men, now we take a look at these four values before through he form.

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William Rosener: Okay, and right now, you can see, there is the lowest cost lowest price golf cart to get the highest price i'm just going to simply use the Max.

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William Rosener: And, just like wait a second i'm going to be using before that, before.

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William Rosener: Okay, and then i'll go ahead and compute the average using those same ranch.

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William Rosener: Okay, and there we go okay so like I mentioned the big advantage of formless is if I come along and change something everything else will automatically get changed so, for example.

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William Rosener: This year was all of a sudden now became 1600 and 40 495 I can see here would be my new monthly payment.

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William Rosener: i'd be paying over $2,000 just an interest, then also notice down here, this is now the new eyes surprise so by making one little change 123.

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William Rosener: Possibly 456 values can automatically be changed, hopefully this video and wind, a little bit about that the pmt function long with the men Max and average functions is in Google sheets on occasion kitchen, the next video thanks bye.