Find how much loan principal a cargo van's payment plan pays off in its first year
CUMPRINC sums just the principal portion of a loan's payments between two period numbers you name — the part CUMIPMT leaves out — so a running balance doesn't need the whole amortization schedule to get there.
Task:
You handle fleet financing for a regional delivery company that just financed a cargo van for $38,000, to be repaid in 72 equal monthly payments at a 5.4% annual interest rate. The finance team wants to know, after the first year of payments, how much of that $38,000 has actually been paid down versus how much is still owed. In B5, use CUMPRINC to find the total principal paid across Year 1 (payments 1 through 12). In B6, subtract that from the original loan amount to find the balance still outstanding.
Interactive Spreadsheet
Hints
+5 XPno-hints bonusSolve it on your own to keep the bonus. Each hint gets one step closer to the formula.
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 | Item | Value |
| 2 | Loan amount | 38000 |
| 3 | Annual interest rate | 0.054 |
| 4 | Term (months) | 72 |
| 5 | Principal paid in Year 1 | |
| 6 | Remaining balance after Year 1 |
What this exercise teachesMay contain the answer
CUMPRINC isolates the principal slice of however many payments fall between the two period numbers you name, instead of requiring the full amortization table just to add up twelve rows of it. The split matters here because a level payment sends a growing share toward principal every month as the balance drops, so the figure CUMPRINC returns for a later year keeps rising even though the payment itself never changes — a running balance tracked this way stays accurate without ever building that twelve-row table.