Excel allows a user to calculate a cumulative loan interest, by using the **CUMIPMT** function. This step by step tutorial will assist all levels of Excel users in calculating a cumulative loan interest.

*Figure 1. The result of the CUMIPMT function*

**Syntax of the CUMIPMT Formula**

The generic formula for the CUMIPMT function is:

**=CUMIPMT(rate, nper, pv, start_period, end_period, type)**

The parameters of the CUMIPMT function are:

**rate**– an interest rate for the period (the annual rate divided by 12)**nper**– the total number of payments for a loan**pv**– the present value of a loan**start_period**– a start period of a loan**end_period**– an end period of a loan**type**– specifies when the payments are made: at the end of a period (0) or at the beginning of a period (1).

**Setting up Our Data for the CUMIPMT Function**

* Figure 2. Data that we will use in the CUMIPMT example*

Let’s look at the structure of the data we will use. In the cell C2, we have the annual interest rate for the loan. In the cell C3, is the total number of payments, while in the C5 is the present value of the loan. Cells C5 and C6 contain the start and end period. We want to get the result of the CUMIPMT function in the cell E3.

**Calculate the Cumulative Loan Interest Using the CUMIPMT**

In our example, we want to get the cumulative loan interest for the whole period of the loan in the cell E3. Because of that the start period is 1 and the end is 24. The interest rate is 8.50% and the present value of the loan is $8,000.

The formula looks like:

**=CUMIPMT(C2/12 ,C3, C4, C5, C6, 0)**

The parameter **rate** is C2/12, as we must pass the monthly interest rate to the function. The **nper** is the cell C4 (24), while the **start_period** is C5 (1) and the **end_period** is C6 (24). The **pv** is in the C5 ($8,000). The **type** is 0, as the payments are being made at the end of the period.

To apply the CUMIPMT function, we need to follow these steps:

- Select cell E3 and click on it
- Insert the formula:
`=CUMIPMT(C2/12 ,C3, C4, C5, C6, 0)`

- Press enter

*Figure 3. Using the CUMPIPMT function to calculate the cumulative loan interest*

Finally, the result in the cell E3 is -727.49, which is the cumulative loan interest. The result is always negative, as it is the payment.

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