In the PMT function syntax, which arguments are optional?

In the PMT function syntax, which arguments are optional?

• A. fv and type
• B. rate
• C. nper
• D. pv

Answer: (A)

In the PMT function, the number of payments, the interest rate per period, and the present value are the essential inputs you must provide. The two inputs that can be left out are fv and type. If you don’t specify them, the function uses default values: future value (fv) defaults to 0, and type defaults to 0, meaning payments are made at the end of each period. This is why those two arguments are considered optional. You can omit them when you don’t need to set a desired ending value or change the payment timing; for example, PMT(rate, nper, pv) gives you the standard end-of-period payment with no specified future value, while adding type as 1 would shift payments to the beginning of each period, and adding a nonzero fv would set a specific ending amount.

In the PMT function, the number of payments, the interest rate per period, and the present value are the essential inputs you must provide. The two inputs that can be left out are fv and type. If you don’t specify them, the function uses default values: future value (fv) defaults to 0, and type defaults to 0, meaning payments are made at the end of each period. This is why those two arguments are considered optional. You can omit them when you don’t need to set a desired ending value or change the payment timing; for example, PMT(rate, nper, pv) gives you the standard end-of-period payment with no specified future value, while adding type as 1 would shift payments to the beginning of each period, and adding a nonzero fv would set a specific ending amount.