HP 12C Instruction Manual page 3

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HP 12C Platinum Mortgages with balloon payments
Solution: Enter the relevant values in any order and compute the FV:
8.75 gC 5 gA 114400 $ 900 ÞP M
Answer: After five years, a balloon payment of $109,467.03 must be made to bank.
Example 2: A $150,000 house is bought with a 20-year mortgage loan having an annual interest rate of 6.75%,
compounded monthly. After eight years the family needs to move to another state and the house must be
sold. If they were to pay off the remaining balance on the loan, how much would the final balloon payment
be?
Solution: The regular payment for the 20-year original mortgage plan must be calculated first:
6.75 gC 30 gA 150000$ 0 M P
This is the monthly payment. Now the new period is established prior to calculate the balloon payment:
In RPN mode:
In algebraic mode:
Answer: The final amount owed on the loan, which is a balloon payment, is $133,620.41.
Example 3: The family from previous example was informed (in time) that they would not need to move for two more
years. What would the balloon payment be at that time with this unexpected change?
Solution: Assuming that all previous data is kept in the calculator, it is enough to set the new period and calculate the
balloon payment again:
In RPN mode:
In algebraic mode:
Answer: The balloon payment will then be $127,951.50 after ten years.
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8 gA M
8 gA M M
10 gA M
10 gA M M
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Figure 6
HP 12C Platinum Mortgages with balloon payments - Version 1.0