Final answer:
The PMT function in cell C20 for calculating the monthly payment on a $300,000 loan with a 6% annual interest rate convertible monthly over 30 years is =PMT(6%/12, 30*12, -300000). This function helps in determining the monthly payment, and paying an extra month's payment per year can save on interest and loan duration.
Step-by-step explanation:
To calculate the monthly loan payment for a vehicle using the PMT function, you would need to use the loan amount, interest rate, and loan term as your inputs. For a $300,000 loan with a 6% annual interest rate that is convertible monthly, and with a loan term of 30 years, the formula in cell C20 would be:
=PMT(6%/12, 30*12, -300000)
The PMT function requires the rate to be the monthly interest rate (hence dividing the annual rate by 12), the number of periods (in this case, 30 years multiplied by 12 months per year), and the present value of the loan, which is the loan amount. Note that the loan amount should be entered as a negative value since it represents an outgoing payment.
Making larger monthly payments by a fraction of 12, equivalent to making 13 payments a year, can save time and money on your loan. This is because you're paying more than the minimum required each month, which reduces the principal faster and results in less interest accrued over time.