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Example 1: A borrower is charged 2 points for the issuance of his mortgage. If the
Example 1:
Example 1:
Example 1:
mortgage amount is $60,000 for 30 years and the interest rate is 11
year, with monthly payments, what true annual percentage rate is the borrower
paying ? (One point is equal to 1% of the mortgage amount.)
Keystrokes
Keystrokes
Keystrokes
Keystrokes
gÂ
fCLEARG
30gA
11.5gC
60000$
P
:$2b-$
¼
12
Example 2:
Example 2: Using the same information as given in example 1, calculate the APR if
Example 2:
Example 2:
the mortgage fee is $150 instead of a percentage.
Keystrokes
Keystrokes
Keystrokes
Keystrokes
gÂ
fCLEARG
30gA
11.5gC
60000$
P
:$150-$
¼
12
Section 12: Real Estate and Lending
Section 12:
Real Estate and Lending
Section 12:
Section 12:
Real Estate and Lending
Real Estate and Lending
Display
Display
Display
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360.00
Months (into n n n n )
0.96
Percent monthly interest rate (into i i i i ).
60,000.00
Loan amount (into PV).
–594.17
Monthly payment (calculated).
58,800.00
Actual amount received by borrower
(into PV).
0.98
Percent monthly interest rate
(calculated).
11.76
Annual percentage rate.
Display
Display
Display
Display
360.00
Months (into n n n n )
0.96
Percent monthly interest rate (into i i i i ).
60,000.00
Loan amount (into PV).
–594.17
Monthly payment (calculated).
59,850.00
Effective mortgage amount (into PV).
0.96
Monthly interest rate (calculated).
11.53
Annual percentage rate.
125
125
125
125
1
/
% per
2
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