ISPMT function
Rate
The interest rate per period.
Period
The period for which interest should be calculated.
NumberOfPeriods
The total number of payment periods in the term.
Principal
The initial sum borrowed.
Returns
The interest paid in a period.
Returns the interest paid in a period for a fixed-rate loan.
Examples
Returns $-450. Let's assume that you take out a four-year loan of $12,000 at a yearly interest rate of 5%, making yearly payments. On the day you take out the loan, you repay capital of $12,000 / 4 = $3,000, which leaves an outstanding capital balance of $12,000 - $3,000 = $9,000. At the end of the first period, interest will be due: $9,000 * 5% = $450. The sign is negative, because you have to pay the interest.
Returns $-300. Let's assume that you take out a four-year loan of $12,000 at a yearly interest rate of 5%, making yearly payments. At the start of the second period, you pay the $450 interest due as above, and you also repay a second $3,000 of capital, leaving an outstanding capital balance of $9,000 - $3,000 = $6,000. At the end of the second period, interest will be due: $6,000 * 5% = $300. The sign is negative, because you have to pay the interest.
Returns $-150. Let's assume that you take out a four-year loan of $12,000 at a yearly interest rate of 5%, making yearly payments. At the start of the third period, you pay the $300 interest due as above, and you also repay a third $3,000 of capital, leaving an outstanding capital balance of $6,000 - $3,000 = $3,000. At the end of the third period, interest will be due: $3,000 * 5% = $150. The sign is negative, because you have to pay the interest.
Returns $0. Let's assume that you take out a four-year loan of $12,000 at a yearly interest rate of 5%, making yearly payments. At the start of the fourth period, you pay the $150 interest due as above, and you also repay a fourth $3,000 of capital, leaving an outstanding capital balance of $3,000 - $3,000 = $0. As a result, there is no interest to pay during the fourth period.