This equation will be updated upon the change or entry of any data that is referenced in the equation. Dividing by 12 will give us the interest rate for the payment period - in this case a payment period of one month. It is also important to type in the reference to the constants instead of the constants. I could change the months above and the payment would not change. Remember to enter the cell where the data is stored and NOT the data itself.
Formulas are mathematical equations.