Sharp EL-738 EL-738 Operation Manual - Page 37

Calculating payments, interest, and loan bal, ance after a specified payment

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2 Calculating payments, interest, and loan balance after a specified payment You have taken out a 30-year loan for $500,000, with an annual interest rate of 8.5%. If, after the 48th period, you want a balloon payment due, what amount of monthly payment must you make with monthly compounding and how much will the balloon payment be? Procedure Set all the variables to default values. Key operation s . b Display 000 Make sure ordinary annuity is set (BGN is not displayed). Set TVM solver variables and calculate payment. . w 12 Q s 30 . < N 500000 v 0 T 8.5 f @ u PMT= -384457 Answer: The monthly payment is $3,844.57. Now generate an amortization schedule from the first to the 48th payments. Procedure Key operation Display Change to amortization * 1 Q calculation and enter 1 for the starting payment. AMRT P1= 100 Enter 48 (December) i 48 Q for the ending payment. AMRT P2= 4800 Display the balance af- i ter 48 months. (balloon payment) BALANCE= 48275524 Display the principal i paid over 48 months. ÍPRINCIPAL= -1724476 Display the interest i paid over 48 months. ÍINTEREST= -16729460 Answer: The balloon payment after the 48th period would be $482,755.24. 36

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36
Calculating payments, interest, and loan bal-
ance after a specified payment
You have taken out a 30-year loan for $500,000, with an annual
interest rate of 8.5%. If, after the 48th period, you want a balloon
payment due, what amount of monthly payment must you make
with monthly compounding and how much will the balloon pay-
ment be?
Procedure
Key operation
Display
Set all the variables to
default values.
s
.
b
000
Make sure ordinary annuity is set (
BGN
is not displayed).
Set TVM solver vari-
ables and calculate
payment.
.
w
12
Q
s
30
.
<
N
500000
v
0
T
8.5
f
@
u
PMT=
-384457
Answer:
The monthly payment is $3,844.57.
Now generate an amortization schedule from the first to the
48th payments.
Procedure
Key operation
Display
Change to amortization
calculation and enter 1
for the starting payment.
*
1
Q
AMRT
P1=
100
Enter 48 (December)
for the ending payment.
i
48
Q
AMRT
P2=
4800
Display the balance af-
ter 48 months. (balloon
payment)
i
BALANCE=
48275524
Display the principal
paid over 48 months.
i
ÍPRINCIPAL=
-1724476
Display the interest
paid over 48 months.
i
ÍINTEREST=
-16729460
Answer:
The balloon payment after the 48th period would be
$482,755.24.
2