Question : Which function will be used for calculating interest included in installment of a loan ?
Option 1: PPMT
Option 2: IPMT
Option 3: FAPM
Option 4: None of above
Correct Answer: IPMT
Solution : The interest component of a given loan payment in a particular payment period can be calculated using the IPMT function. The interest amount of a payment for the initial period, the last period, or any other period in between, for instance, can be obtained using IPMT.
Hence the correct answer is option 2.