HP HP12C hp 12c_user's guide_English_E_HDPMBF12E44.pdf - Page 125

Real Estate and Lending

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Section 12: Real Estate and Lending 125 Example 1: A borrower is charged 2 points for the issuance of his mortgage. If the mortgage amount is $60,000 for 30 years and the interest rate is 111/2% per year, with monthly payments, what true annual percentage rate is the borrower paying? (One point is equal to 1% of the mortgage amount.) Keystrokes g fCLEARG 30gA 11.5gC 60000$ P :$2b-$ ¼ 12§ Display 360.00 0.96 60,000.00 -594.17 58,800.00 0.98 11.76 Months (into n) Percent monthly interest rate (into i). Loan amount (into PV). Monthly payment (calculated). Actual amount received by borrower (into PV). Percent monthly interest rate (calculated). Annual percentage rate. Example 2: Using the same information as given in example 1, calculate the APR if the mortgage fee is $150 instead of a percentage. Keystrokes g Display fCLEARG 30gA 11.5gC 60000$ P :$150-$ 360.00 0.96 60,000.00 -594.17 59,850.00 Months (into n) Percent monthly interest rate (into i). Loan amount (into PV). Monthly payment (calculated). Effective mortgage amount (into PV). ¼ 12§ 0.96 11.53 Monthly interest rate (calculated). Annual percentage rate. File name: hp 12c_user's guide_English_HDPMBF12E44 Printered Date: 2005/7/29 Page: 125 of 209 Dimension: 14.8 cm x 21 cm

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Section 12: Real Estate and Lending
125
File name: hp 12c_user's guide_English_HDPMBF12E44
Page: 125 of 209
Printered Date: 2005/7/29
Dimension: 14.8 cm x 21 cm
Example 1:
A borrower is charged 2 points for the issuance of his mortgage. If
the mortgage amount is $60,000 for 30 years and the interest rate is 11
1
/
2
% per
year, with monthly payments, what true annual percentage rate is the borrower
paying
?
(One point is equal to 1% of the mortgage amount.)
Keystrokes
Display
gÂ
f
CLEAR
G
30
gA
360.00
Months (into
n
)
11.5
gC
0.96
Percent monthly interest rate (into
i
).
60000
$
60,000.00
Loan amount (into PV).
P
–594.17
Monthly payment (calculated).
:$
2
b-$
58,800.00
Actual amount received by borrower
(into PV).
¼
0.98
Percent monthly interest rate
(calculated).
12
§
11.76
Annual percentage rate.
Example 2:
Using the same information as given in example 1, calculate the
APR if the mortgage fee is $150 instead of a percentage.
Keystrokes
Display
gÂ
f
CLEAR
G
30
gA
360.00
Months (into
n
)
11.5
gC
0.96
Percent monthly interest rate (into
i
).
60000
$
60,000.00
Loan amount (into PV).
P
–594.17
Monthly payment (calculated).
:$
150
-$
59,850.00
Effective mortgage amount (into PV).
¼
0.96
Monthly interest rate (calculated).
12
§
11.53
Annual percentage rate.