Sharp EL-733 EL-733A Operation Manual - Page 47

I.12I

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PV = ? i=10÷12 I 'I' n = 360 11,5$551,9561,57,frst5to lk PMT= -882.00 FV = 0 Finally, key in the three remaining numbers from that cash-flow schedule, and solve for the present value: 10 2nd I.12I El 30 Ficil 0 EI Make sure you are not in BGN mode! ji g Result: 100'504.62 So the couple can probably finance about $1001500 on a house.: They also have to meet a down payment requirement (around 10% down) before they can look for houses in this range. QuotingAn Actual Effective Interest Rate Truth-in-lending laws require banks and financial institutions to quote actual, effective annual rates (including prepaid finance charges) and total interest paid on a loan or contract. The following example demonstrates how to quote an actual effective rate. Quoting total interest paid is demonstrated in the example that starts on page 94. Example: The lending institution where you work loaned $145'000 to an individual for a term of 18 years. The nominal interest rate was 14% APR, compounded monthly, with a prepaid finance charge of 1.5%. Payments on the loan are monthly. What is the actual, effective APR on this contract? Solution: The first step in this solution is to calculate the payment based on the periodic rate (14 +12). The cash-flow schedule of the loan used to calculate this payment is as follows: PMT FV= 0 It t tt PV = -145'000 1210121:2112121:2151216. 1 I= 14 12 n =18 X 12 The keystrokes required to solve for the payment on this loan are (make sure that the FIN indicator is on in the display. If you don't know how to turn that indicator on and off, turn to page 10): 145'000 [+/-I 0 18 12nd9I [X121 14 I2nd9 H121 LU 0 E M Result: 1842.06 91

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PV
=
?
I
'I'
i=10÷12
n
=
360
1
1,5$551
,
9561,57
,
frst5to
l
k
PMT=
-882.00
FV
=
0
Finally,
key
in
the
three
remaining
numbers
from
that
cash
-flow
schedule,
and
solve
for
the
present
value:
10
2nd
I.12I
El
30
Ficil
0
EI
Make
sure
you
are
not
in
BGN
mode!
ji
g
Result:
100'504.62
So
the
couple
can
probably
finance
about
$100
1
500
on
a
house.:
They
also
have
to
meet
a
down
payment
requirement
(around
10%
down)
before
they
can
look
for
houses
in
this
range.
Quoting
An
Actual
Effective
Interest
Rate
Truth
-in
-lending
laws
require
banks
and
financial
institutions
to
quote
actual,
effective
annual
rates
(including
prepaid
fi
nance
charges)
and
total
interest
paid
on
a
loan
or
contract.
The
following
example
demonstrates
how
to
quote
an
actual
effective
rate.
Quoting
total
interest
paid
is
demonstrated
in
the
example
that
starts
on
page
94.
Example:
The
lending
institution
where
you
work
loaned
$145'000
to
an
individual
for
a
term
of
18
years.
The
nominal
interest
rate
was
14%
APR,
compounded
monthly,
with
a
prepaid
fi
nance
charge
of
1.5%.
Payments
on
the
loan
are
monthly.
What
is
the
actual,
effective
APR
on
this
contract?
Solution:
The
fi
rst
step
in
this
solution
is
to
calculate
the
payment
based
on
the
periodic
rate
(14
+
12).
The
cash
-flow
schedule
of
the
loan
used
to
calculate
this
payment
is as
follows:
PMT
FV=
0
It
t
tt
1210121:2112121:215121
.
61
I=
14
12
PV
=
—145'000
n
=18
X
12
The
keystrokes
required
to
solve
for
the
payment
on
this
loan
are
(make
sure
that
the
FIN
indicator
is
on
in
the
display.
If
you
don't
know
how
to
turn
that
indicator
on
and
off,
turn
to
page
10):
145'000
[+/-I
18
12nd9I
[X121
0
14
I2nd9
H121
LU
0
E
M
91
Result:
1842.06