If you're working with loans, mortgages, or installment plans, Excel’s PPMT function helps break down your payments and show how much of each one goes toward the principal—not just the total payment. Let's explore how it works step by step, from the basics to more advanced, real-world uses. The PPMT function calculates the principal portion of a loan payment for a given period, based on constant interest and fixed payments.

NPER stands for Number of Periods. The NPER function in Excel calculates how many payment periods are needed to pay off a loan or reach an investment goal, based on constant payments and a constant interest rate. In simple words: NPER tells you "how long will it take" to finish paying or saving.

The CUMPRINC function in Excel calculates the cumulative principal paid on a loan between two periods. In simple terms, it helps you determine how much of the loan principal has been repaid between two specific periods, based on the loan's interest rate, payment schedule, and loan amount. This function is often used for loan amortization schedules and to analyze how much of the loan balance has been reduced over time.