Sharp EL733A EL-733A Operation Manual - Page 65

tttt, t75 t76

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Solution: The first step is to calculate the Present Value of the first mortgage. You are given the payment schedule, and all the necessary knowns, so this step is very much like the problem on page 50. This is the cash-flow schedule: FV = 32'000 1tttt PMT = 1'678.40 173 t4 t75 t76 t77 t78 t79 • 1=-10.5 4- 12 n =79 PV =? The keystrokes for this PV calculation are: (Mode: PIN) PM 1'678.4 INT) 79 EJ 10.5 indr l

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Solution:
The
fi
rst
step
is
to
calculate
the
Present
Value
of
the
fi
rst
mortgage.
You
are
given
the
payment
schedule,
and
all
the
necessary
knowns,
so
this
step
is
very
much
li
ke
the
problem
on
page
50.
This
is
the
cash
-flow
schedule:
FV
=
32'000
PMT
=
1'678.40
•
1tttt
173 t4
t75 t76
t77
t78
t79
n
=79
1=-10.5
4-
12
PV
=?
The
keystrokes
for
this
PV
calculation
are:
(Mode:
PIN)
PM
1'678.4
INT)
79
EJ
10.5
indr
CD
32'000
l<121
Pnwl
Result:
—111'515.75
So
the
fi
rst
loan
is
worth
$111'515.75
based
on
the
original
10.5%
APR.
Next,
you
need
to
calculate
the
payment
on
the
new
loan.
You
are
loaning
an
additional
$50'000
to
this
person,
so
add
that
to
the
above
number
and
store
it
as
the
PV.
The
cash
-flow
schedule
to
calculate
the
payment
on
this
wrap
-around
is
as
follows:
PMT=?
itttts
PV
=-161'515.75
i=1
FV
=
15'000
A
3
5135
51
6
3
5
61357135
8t35
9t3
6
0
n
=30
X
12
This,
again
is
a
simple
TVM
calculation.
Assuming
you
have
been
following
along,
the
keystrokes
are:
linds)
EZ
03
50'000
B
15'000
[11
1
30
12nd
Result:
1'657.08
The
borrower
will
be
happy
to
see
that
this
monthly
payment
is
actually
lower
than
the
current
mortgage
payment.
Granted,
it
continues
for
360
months
instead
of
79
months,
but
that
may
be
beside
the
point
..?