Interest Rebate - Rule Of 78'S - HP 12c Platinum Reference Manual

30 Lending
9. Press t to calculate the total finance charge.
10. Press t to calculate the annual percentage rate.
11. For a new loan return to step 3.
Example 1: You wish to quote a loan on a $3100 balance, payable over 36 months at an
add-on rate of 6.75%. Credit life (CL) is 1%. What are the monthly payment amount,
credit life amount, total finance charge, and APR?
12c platinum / 12C
RPN Keystrokes
fCLEARG
36?0
6.75?1
1?2
3100?3
t
t
t
t

Interest Rebate - Rule of 78's

This procedure finds the unearned interest rebate, as well as the remaining principal
balance due for a prepaid consumer loan using the Rule of 78's. The known values are the
current installment number, the total number of installments for which the loan was
written, and the total finance charge (amount of interest). The information is entered as
follows:
RPN Mode:
1. Key in number of months in the loan and press ?1.
2. Key in payment number when prepayment occurs and press -?2 1+.
3. Key in total finance charge and press §:1\§:1+z:2§ to
obtain the unearned interest (rebate).
4. Key in periodic payment amount and press :2§~- to obtain the amount of
principal outstanding.
ALG Mode:
1. Key in number of months in the loan and press ?1-.
2. Key in payment number when prepayment occurs and press³?2+1§.
3. Key in total finance charge and press ³:1g'+:1z~~§:2
³ to obtain the unearned interest (rebate).
4. Key in periodic payment amount and press §:2-~³ to obtain the amount
of principal outstanding.
12c platinum
ALG Keystrokes
fCLEARG
36?0
6.75?1
1?2
3100?3
t
t
t
t
Display
Months.
36.00
Add-on interest rate.
6.75
Credit life (%).
1.00
Loan.
3100.00
Monthly payment.
-107.42
Credit life.
116.02
Total finance charge.
-651.10
APR.
12.39
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