Sharp EL733A EL-733A Operation Manual - Page 28

or

1%

per

month.

With

your

calculator

in

FIN

mode

and

your

display

set

to

2ndF

ED,

here

are

the

keystrokes.

Make

sure

BGN

is

off:

300

1

1-

/-I

IFtfil

0f

1

co

4

2ndF

[X

-

12f

land

Result:

11'392.19

Now

how

much

more

can

you

afford

to

borrow

if

you

go

for

5

year

fi

nancing?

Since

you

have

the

problem

all

keyed

in,

just

change

the

one

value

(n)

and

recalculate

PV:

5

COATI

2nd

1202J

El

PV

Result:

13'486.51

Example:

You

fi

nally

fi

nd

a

car

that

you

like

with

a

price

tag

of

$23'000.00.

You

can

expect

to

get

about

$3'600

trade

in

on

your

old

car.

What

will

your

monthly

payments

be

on

a

5

year

loan?

Solution:

Again,

there's

only

one

value

(PV)

that

you

need

to

change,

and

then

you

need

to

recalculate

the

payment.

23'000

Q

3600

E

[Ey

Result:

—431.54

Example:

You

luck

out

and

fi

nd

some

fi

nancing

at

10.5%

APR.

How

does

that

affect

your

payment?

Solution:

Just

key

in

the

new

interest

rate

(make

it

a

periodic

rate)

and

then

solve

for

the

new

payment.

Here

are

the

keystrokes:

10.5

Vdni-

,

121M

MN

nil

Result:

—416.98

Can

your

budget

handle

this

slight

extension

for

the

car

you

want?

No

problem,

right?

You

can

see

that

the

EL

-733A

is

a

handy

tool

to

take

with

you

whenever

you

are

on

the

way

to

buy

a

car

or

to

make

some

purchase

that

will

involve

financing.

But

we

haven't

yet

covered

all

the

aspects

of

TVM

problems.

We

have

only

covered

PMT

and

PV

calculations

to

this

point, and

this

is

just

a

scratch

on

the

surface

of

fi

nancial

calculations.

ALLOON

PAYME

TS

AND

ALCUL>ATIONS

On

the

EL

-733A,

the

future

value

(

Q

)

is

an

amount

left

at

the

end

of

the

cash

-flow

schedule

that

is

separate

from

any

regular

payment

that

may

occur

at

that

same

point.

In

the

case

of

a

balloon

payment,

which

is

a

payment

at

the

end

of

a

loan

contract

that

completely

pays

of

the

remaining

balance,

it

is

important

to

recognize

that

the

result

for

FV

may

have

to

be

added

to

a

payment

amount

to

determine

the

actual

fi

nal

payment

amount

on

the

loan.

Example:

As

a

construction

engineer,

you

recently

got

a

fi

ve

year

contract

job

in

Utah

overseeing

the

construction

of

a

modern,

clean,

coal-fired

power

plant.

You

were

able

to

purchase

a

nice

house

with

a

15

year

mortgage

of

$97'000.00

at

an

interest

rate

of

11.5%

APR.

However

because

your

job

is

on

a

fi

ve

year

contract,

a

balloon

payment

is

scheduled

at

the

end

of

those

fi

ve

Sharp EL733A EL-733A Operation Manual - Page 28

Coati

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