Paying Off A Loan With Larger Payments - Texas Instruments BA Real Estate User Manual

Paying Off a Loan with Larger Payments

Solution
24 Mortgages and Amortization
A client has just borrowed $125,000 for 30 years at 7.75%.
If she is able to increase her payment amount by $100
per month, how quickly can she pay the note off?
Press
Steps
Clear TVM values.
Set P/Y and C/Y to 12.
Enter term in years.
Enter interest rate.
Enter loan amount.
Compute payment.
Add extra payment
amount as a negative
value.
Calculate and enter
new payment amount.
Compute new term.
Your client can pay off the loan in about 21.6 years.
until the BGN indicator disappears.
Keystrokes
12
30
7.75
125
100
Display
0.00
P/Y = 12.00
C/Y = 12.00
12.00
TRM= 30.00
I% = 7.75
LN = 125,000.00
-895.52
PMT=
-100
-995.52
PMT=
TRM= 21.56