HP 10B - Manual (Page 59)

30 WxP/YRI 360.00 Stores the length of the
mortgage (30
X
12).
0.00 Pays mortgage off in 30
years.
11.5 n/YRl 11.50 Stores interest rate.
630(S (P m T) -630.00 Stores desired payment
(money paid out is
negative).
m
63,617.64 Calculates the loan you
can afford with a $630
payment.
a 12000 a
75,617.64 Adds $12,000 down
payment for the total
purchase price.
Example: A Mortgage With a Balloon Payment.
You’ve obtained
a 25 year, $72,500 mortgage at 13.8% annual interest. You anticipate (hat
you will own the house for four years and then sell it, repaying the loan
with a balloon payment. What will your balloon payment be?
Solve this problem using (wo steps:
1. Calculate (he loan payment using a 25 year term.
2. Calculate the remaining balance after 4 years.
Step 1.
First calculate the loan payment using a 25 year term.
PV » 72.500
PMT - ?
End Mode
56 5: Time Value of Money Calculationa