HP 48gII hp 48gII_user's manual_English_E_HDPMSG48E67_V2.pdf - Page 212

The screen now shows the value of PMT as -39,132.30, i.e., the borrower must pay the lender US $ 39,132.30 at the end of each month for the next 60 months to repay the entire amount. The reason why the value of PMT turned out to be negative is because the calculator is looking at the money amounts from the point of view of the borrower. The borrower has + US $ 2,000,000.00 at time period t = 0, then he starts paying, i.e., adding -US $ 39132.30 at times t = 1, 2, ..., 60. At t = 60, the net value in the hands of the borrower is zero. Now, if you take the value US $ 39,132.30 and multiply it by the 60 payments, the total paid back by the borrower is US $ 2,347,937.79. Thus, the lender makes a net profit of $ 347,937.79 in the 5 years that his money is used to finance the borrower's project. Example 2 - Calculating amortization of a loan The same solution to the problem in Example 1 can be found by pressing @)@AMOR!!, which is stands for AMORTIZATION. This option is used to calculate how much of the loan has been amortized at the end of a certain number of payments. Suppose that we use 24 periods in the first line of the amortization screen, i.e., 24 @@OK@@. Then, press @@AMOR@@. You will get the following result: This screen is interpreted as indicating that after 24 months of paying back the debt, the borrower has paid up US $ 723,211.43 into the principal amount borrowed, and US $ 215,963.68 of interest. The borrower still has to pay a balance of US $1,276,788.57 in the next 36 months. Check what happens if you replace 60 in the Payments: entry in the amortization screen, then press @@OK@@ @@AMOR@@. The screen now looks like this: Page 6-11