Syntax of ISPMT
The ISPMT function in DAX has the following syntax:
- `rate`: The interest rate per period.
- `nper`: The total number of payment periods.
- `pv`: The present value of the loan.
- `nper_start`: The starting period of the interest payment. If omitted, the function assumes the first period.
- `nper_end`: The end period of the interest payment. If omitted, the function assumes the last period.
Note that the `rate` and `nper` arguments must be expressed in the same units of time, for example, both in months or both in years.
Example of Using ISPMT
Let's take a look at an example to understand how ISPMT works. Suppose you have borrowed $10,000 at an annual interest rate of 5% for a period of 5 years. The present value of the loan, `pv`, is -$10,000 (since it is a loan), the interest rate per period, `rate`, is 5% divided by 12 (assuming monthly payments), which is 0.0041667, and the total number of payment periods, `nper`, is 5 times 12, which is 60. To calculate the interest payment for the first period, we can use the following formula:
This returns a value of -$41.67, indicating that the interest payment for the first month is $41.67. If we want to calculate the total interest payment for the whole period, we can use the formula:
This returns a value of -$2,500, indicating that the total interest payment for the whole period is $2,500.
Using ISPMT in Power BI
Now that we have understood the basics of the ISPMT function, let's see how to use it in Power BI. Suppose we have a data table containing loan information, including the present value, interest rate, and period. To calculate the interest payment for each period, we can create a new column and use the ISPMT function in the DAX formula.
Here is an example DAX formula that calculates the interest payment for the first period:
Interest Payment = ISPMT(LoanTable[Interest Rate]/12,LoanTable[Periods],-LoanTable[Present Value],1,1)
In this formula, we have assumed that the interest rate is expressed as an annual rate, so we divide it by 12 to get the monthly rate. We also use the negative sign for the present value, since it represents a loan. The `1,1` arguments specify that we want to calculate the interest payment for the first period only.
To calculate the total interest payment for the whole period, we can use a similar formula without the `nper_start` and `nper_end` arguments:
Total Interest Payment = ISPMT(LoanTable[Interest Rate]/12,LoanTable[Periods],-LoanTable[Present Value])
In this formula, the ISPMT function will calculate the interest payment for all periods from the first to the last.
The ISPMT function in DAX is a powerful tool for financial analysis in Power BI. With its help, you can easily calculate the interest payment for a loan based on the interest rate, number of periods, and present value. By using this function in your Power BI reports, you can create insightful visuals and draw valuable insights to help make better business decisions.