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Calculating Canadian Mortgage Payments


Problem:

The following PMT formula calculates the monthly payment for a $100,000 mortgage, repaid over a period of 20 years, at 8% annual interest:
=PMT(8%/12,12*20,100000,0,0)
As Canadian interest rates are calculated semi-annually, rather than annually, the above formula will not calculate the payments correctly.
How can we modify the above PMT formula to calculate monthly payments for Canadian mortgages?

Solution:

With interest rate in column A, period (years) in column B, and mortgage sum in column C, use the PMT function as shown in the following formula:
=PMT((A2/2+1)^(2/12)-1,12*B2,C2,0,0)