CUMPRINC Function
Calculate cumulative principal paid over a range of periods.
Task:
You are analyzing a loan and want to know the cumulative principal paid between two periods. Calculate the cumulative principal paid between periods 1 and 12 in cell B8 using the CUMPRINC function, given the rate, number of periods, and present value.
Learning Objectives:
- Learn CUMPRINC function
- Understand cumulative principal
- 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 | CUMPRINC |
What this exercise teaches (contains the answer)
The CUMPRINC function is useful for understanding the total principal paid over a specific range of periods, which is helpful for financial planning or loan analysis. Look at what a first year actually buys: 2950.73 comes off the 200000 you borrowed, while 9932.99 goes to interest. Twelve payments, and the debt has moved by under one and a half per cent. That ratio is the whole point of an amortisation schedule.