Dax Function: PPMT

Category: Financial Functions

The PPMT function in Power BI calculates the principal portion of a payment for a specific period of an investment or loan. It is particularly useful for breaking down payments into principal and interest components.

Purpose

• To calculate the portion of a payment that reduces the loan’s principal balance during a specific period.

• Used in financial modeling, amortization schedules, and loan analysis.

Type of Calculations

• Computes only the principal portion of a payment based on a fixed interest rate, total periods, and loan amount.

• Complements the IPMT function, which calculates the interest portion.

Practical Use Cases

1. Amortization Schedules: Break down loan payments into principal and interest for each period.

2. Loan Balance Monitoring: Track the reduction in principal over time.

3. Budget Planning: Analyze the impact of principal payments on cash flow.

How Does PPMT Dax Works

Mathematical Principle

The PPMT function is derived from the payment formula:

Where:

• PMT: Total payment amount (calculated using the PMT function).

• IPMT: Interest portion for the specified period (calculated using the IPMT function).

For a specific period (per):

​

Where:

• r: Interest rate per period

• PV: Present value

• n: Total number of periods

• per: Current period

What Does It Return?

• Scalar Value: The principal portion of the payment for the specified period.

• Sign Convention: Returns a negative value to represent outgoing cash flow.

When Should We Use It?

1. Loan Amortization: Create detailed schedules showing the breakdown of principal and interest payments.

2. Interest vs. Principal Analysis: Determine how much of each payment is reducing the principal.

3. Debt Tracking: Monitor how principal payments impact the outstanding balance.

Examples

Basic Usage :

Calculate the principal payment for the 5th month of a $10,000 loan at an annual interest rate of 5% over 5 years:

Result: $150.25 (Principal portion for the 5th month).

Column Usage

Create an amortization table for multiple loans:

Add a calculated column for the principal payment:

Advanced Usage

Combine PPMT with IPMT to show both principal and interest for a payment period:

Result: Outputs the respective components for the 6th period.

Tips and Tricks

• Ensure consistent units for rate and nper (e.g., monthly rate with monthly periods).

• Use negative values for pv to indicate outgoing cash flow.

• Forgetting to specify the per parameter or using values outside the valid range.

• Not converting annual interest rates to period-specific rates.

Performance Impact of PPMT DAX Function:

• Ideal for scalar calculations and periodic analysis.

• For large datasets, precompute static parameters like rate and nper to improve performance.

Related Functions You Might Need

Want to Learn More?
For more information, check out the official Microsoft documentation for PPMT You can also experiment with this function in your Power BI reports to explore its capabilities.

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