Which function returns the cumulative interest paid between two periods?
Which function returns the cumulative interest paid between two periods?
Solution
The CUMIPMT function is specifically designed to calculate the cumulative interest paid on a loan between two specified periods.
The CUMIPMT function syntax is:
CUMIPMT(rate, nper, pv, start_period, end_period, type)
where it returns the total interest paid from the start_period to the end_period.
The other functions serve different purposes:
PMT calculates the periodic payment amount for a loan (includes both principal and interest), not cumulative interest between specific periods.
ACCRINT calculates accrued interest for a security that pays interest periodically, typically used for bonds and other securities, not loan interest payments.
NPV calculates the Net Present Value of an investment based on future cash flows and a discount rate, unrelated to interest payment calculations.
When you need to find total interest paid between period 5 and period 10 of a loan, CUMIPMT is the appropriate function to use.
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