The bank offers to finance your home. The bank will lend you $200,000 for thirty years. The loan will be collateralized by the home you are buying. You are mortgaging your home in order to raise the $200,000. This is what is known as a mortgage loan. If you default the bank will have the right to foreclose on your property. The interest rate on your loan is 10%. Payments are made once a year at the end of the year.

Remember that payments are a negative number when working with Excel. If the PV is positive then the PMT will be negative. After thirty years the 30 year fixed rate mortgage is paid off whcih means that the future value is zero.

Do not use dollar signs. You can use the minus sign to denote a negative number.

What is your annual mortgage payment.

Use the PMT function in Excel.