The CUMPRINC function in Google Sheets is a powerful tool designed to calculate the cumulative principal payments made over a certain period for a loan or investment. This function proves especially useful for financial analysts, accountants, and anyone looking to understand their amortization schedules better, ensuring accurate tracking of principal repayment over time.

Syntax

CUMPRINC(rate, nper, pv, start_period, end_period, type)

• rate: The interest rate for each period.
• nper: The total number of payment periods in the investment.
• pv: The present value, or total amount that a series of future payments is worth now.
• start_period: The first period in which the cumulative principal payment will be calculated.
• end_period: The last period in which the cumulative principal payment will be calculated.
• type: Indicates when payments are due: 0 for the end of the period, 1 for the beginning.

Example #1

CUMPRINC(0.05, 30, 200000, 1, 12, 0)

This function calculates the cumulative principal paid from the first to the twelfth month for a loan of $200,000 at an annual interest rate of 5% with 30 total payment periods. The result would be approximately $3,038.53 in principal repayments.

Example #2

CUMPRINC(0.04, 15, 150000, 1, 6, 0)

This formula determines the cumulative principal paid from month one to month six on a loan of $150,000 with a 4% interest rate over 15 years. The outcome would be around $1,877.43 as principal repaid.

Example #3

CUMPRINC(0.06, 20, 300000, 1, 24, 1)

This command computes the cumulative principal paid from the first to the twenty-fourth month for a $300,000 loan at a 6% annual interest rate over 20 years, with payments made at the beginning of each period. The expected result is approximately $20,731.62 in principal paid off during those months.

Error handling

• VALUE!: Occurs when one or more arguments are non-numeric, such as text instead of numbers.
• NUM!: Indicates invalid numeric values, typically occurring when the present value is zero or negative.
• REF!: Happens when a cell reference is invalid; usually occurs when a referenced cell has been deleted or is not accessible.

Conclusion

The CUMPRINC function is an essential tool for effectively managing loans and investments, providing clarity on how much principal has been paid over specified periods. By understanding its syntax and applications, finance professionals can leverage this function to make informed decisions about their financial commitments and track their repayment progress diligently.