for monthly payments instead of annual payments, the rate and nper components of the formula need to be revised. the rate of 5.6% is an annual rate. the monthly rate is .056/12. the nper is 10 years of monthly payments, or 10*12. the monthly payment formula is =PMT(0.056/12,10*12,100000), or 120 monthly payments of $1.090.22. If the $100,000 was a lease due at the beginning of each month, the formula is simply =PMT(0.056/12,10*12,100000,,1). the result is 120 payments of $1,085.16 due at the beginning of each month, about $5 less per month than paying at the end of each month. notice the two commas between 100000 and 1 in the formula. even though there is no fV, excel still needs the comma to know that the 1 is reflecting when the payments are due, not a future value of 1. now that you are familiar with components of excel’s financial functions like rate, nper, PV, and fV, you can use those components to calculate a wide variety of financial information. excel Videos 142, 143, and 145 at www.mooresolutionsinc.com cover several financial functions in excel. excel’s financial functions can be very powerful, but the functions and this article are no substitute for experienced financial advisors. Please consult your cPA, lender, or other advisor for specific applications of these excel functions. Nate Moore, CPA, MBA, FACMPE writes custom SQL Server code to mine practice management data for analysis in Excel. His free Excel Videos are available at mooresolutionsinc.com. MGMA just published Nate’s first book, Better Data, Better Decisions: Using Business Intelligence in the Medical Practice. SOFTWARE HBMA Remembers during the month of October, HBMA lost a dear friend and long-time member and volunteer, lyle evans. not only did lyle serve HBMA on the education committee, he served his country in the united states navy from 1970 through 1980 and then went on to serve in the naval reserves. lyle was a wonderful gentleman and kind spirit and he will be missed. those wishing to remember lyle can make donations to the Best friends Animal sanctuary at www.bestfriends.org or a charity of your choice. We express our deepest sympathy to lyle’s wife, colleen and son jeremy. Write Much? We are looking for authors. If you would like to write an article for Billing or know of someone who is interested in contributing, please contact us at billing@hbma.org. Our team does all of the editing, so give us your ideas and knowledge – it will benefit all of HBMA. CHBME Elevate your professional stature and gain a competitive edge by pursuing certification as a CHBME! www.hbma.org tHe jOurnAl Of tHe HeAltHcAre BIllIng And MAnAgeMent AssOcIAtIOn 41
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