CUMIPMT Function
Calculate cumulative interest paid over a range of periods.
Task:
You are analyzing a loan and want to know the cumulative interest paid between two periods. Calculate the cumulative interest paid between periods 1 and 12 in cell B8 using the CUMIPMT function, given the rate, number of periods, and present value.
Learning Objectives:
- Learn CUMIPMT function
- Understand cumulative interest
- Practice mortgage analysis
Solve without hints for +5 XP
The data in this exercise
This is the grid you start with. Cell references in the task — B6, C2 — point at the row numbers and column letters below.
| A | B | |
|---|---|---|
| 1 | Parameter | Value |
| 2 | Rate | 0.004166666666666667 |
| 3 | Nper | 360 |
| 4 | Pv | 200000 |
| 5 | Start_period | 1 |
| 6 | End_period | 12 |
| 7 | Type | 0 |
| 8 | CUMIPMT |
What this exercise teaches (contains the answer)
The CUMIPMT function is useful for understanding the total interest paid over a specific range of periods, which is helpful for tax planning or financial analysis. The answer is negative because it is money leaving. CUMIPMT and CUMPRINC split every payment between interest and the loan itself, so across these twelve periods the two of them come to -12883.72 — exactly twelve payments of -1073.64, and nothing left over.