HP 48gII hp 48gII_user's manual_English_E_HDPMSG48E67_V2.pdf - Page 213

This means that at the end of 60 months the US $ 2,000,000.00 principal amount has been paid, together with US $ 347,937.79 of interest, with the balance being that the lender owes the borrower US $ 0.000316. Of course, the balance should be zero. The value shown in the screen above is simply round-off error resulting from the numerical solution. Press $or `, twice, to return to normal calculator display. Example 3 - Calculating payment with payments at beginning of period Let's solve the same problem as in Examples 1 and 2, but using the option that payment occurs at the beginning of the payment period. Use: „Ò 60 @@OK@@ 6.5 @@OK@@ 2000000 @@OK@@ ˜ 0 @@OK@@ @@CHOOS !-@@OK@@ - š @@SOLVE! Start the financial calculation input form Enter n = 60 Enter I%YR = 6.5 % Enter PV = 2,000,000 US$ Skip PMT, since we will be solving for it Enter FV = 0, the option End is highlighted Change payment option to Begin Highlight PMT and solve for it The screen now shows the value of PMT as -38,921.47, i.e., the borrower must pay the lender US $ 38,921.48 at the beginning of each month for the next 60 months to repay the entire amount. Notice that the amount the borrower pays monthly, if paying at the beginning of each payment period, is slightly smaller than that paid at the end of each payment period. The reason for that difference is that the lender gets interest earnings from the payments from the beginning of the period, thus alleviating the burden on the lender. Notes: 1. The financial calculator environment allows you to solve for any of the terms involved, i.e., n, I%YR, PV, FV, P/Y, given the remaining terms in the loan calculation. Just highlight the value you want to solve for, and press @@SOLVE!. The result will be shown in the highlighted field. Page 6-12