B. loan Calculation
1 ) It is always necessary when doing com-
pound interest problems involving pay-
ments to specify whether the first payment
is made in advance (at the beginning of the
first payment period) or at the end of the
first payment period.
a) When the first payment is made in advance
or at the beginning of the "1irst payment
period, use the BGN mode. Calculations
made in the BGN mode are based on the
following equation:
PMTX100 {
i
~N}
i
PV
i
lj-(1+100)
(1+100)
b) When the first payment is made at the end
of the first payment period, use the END
mode. Calculations made in the END mode
are based on the following equation:
PV= PMTX100 { 1 _(
1
+_,_·
)~Nf
I
l
100
J
When: PV:
i:
The principal or present value
The periodic interest rate
PMT:
N:
34
The amount of the payment or
installment
The number ol payment peri-
ods or installments
@I
Set the LOAN mode first and then depress
the
0
and
a
keys to set either the
BGN or END mode.
®
Use the END mode during amortization
calculations.
C©Jiclliating the Amollnt of Payment (lo<m
Repayment) (Examp!e 1)
If you borrow $1,000 and want to repay the
loan over a ten-year period, what would your
monthly payments be
if the annual interest
rate of 5.5% is compounded monthly?
I
PV
I
I
PMT
I
N
I
I
1 000
I
5.5/1 2
I
?
11
0
Xi
21
Operation
D1splay
Comments
MODE
Set the mode at
D
LOA~I
LOAN
COMP
MODE
END LOAN
Set the mode at
DO
END
D~
0.
Clear the data
memor1es
IOOOEJ
1000.
Input tl1e
present value
5.5812GCJ
0.458333333
Input tile
interest rate
IOG]I2GG
120.
Input the number
of periods
08
I 0. 85262777
Payment
COMP WI)OE
BGN
Change the
DO
mode to BGN
D~
I 0. 8031135
Payment
35