HP -22S Owner's Manual page 136

3001211NPuri
[~r 120000
8=63,617.64
75,617.64
Stores N, calculates
loan amount.
Calculates total price
(loan plus down
payment).
Example: A Mortgage With a Balloon Payment. You've taken out
a 25-year, $75,250 mortgage at 13.8% annual interest. You anticipate
that you will own the house for four years and then sell it, repaying
the loan in a "'balloon payment." What will be the size of your balloon
payment at the end of four years?
8=75,250
p=?
The problem is done in two steps:
1. Calculate the monthly payment. This calculation is done using
the total length of the loan (25 years), assuming no balloon pay-
ment.
2. Calculate the balloon payment after 4 years. Use the monthly
payment rounded to dollars and cents for P.·
• The payment calculated in step #1 is stored as a 12-digit number. The calculation of the
balloon payment must use the actual dollars and cents monthly payment amount.
136 8: Additional Examples