Loan With A Partial (Odd) First Period - HP 10BII Owner's Manual

Loan With a Partial (Odd) First Period
ТУМ calculations apply to financial transactions where each payment
period is the same length. However, situations exist where the first
payment period is not the same length as the remaining periods. This first
period is sometimes called an odd or partial first period.
If interest is applied to an odd first period, it is usually calculated as
simple interest. So using the HP 10BII to do a payment calculation with
an odd first period is a two step process:
1. Calculate the amount of simple interest that accrues during the
fractional first period and add it to the loan amount. This is the new
PV. You must be able to calculate the length of the odd first period
as a fraction of the whole period. (For example, a 15-day odd first
period would be 0.5 periods assuming a whole period to be a 30-day
month.)
2. Calculate the payment using the new PV, with N equal to the
number of full periods. Use Begin mode if the number of days until
the first payment is less than 30; otherwise use End mode.
Example. A 36-month loan for $4,500 has an annual rate of 15%. If the
first monthly payment is made in 46 days, what is the monthly payment
amount assuming 30-day months?
The odd first period in this example is 16 days.
Set to End mode. Press QES if BEGIN annunciator is displayed.
Display: Description:
12.00 Sets payments per year.
15.00
Stores interest rate.
1.25
Calculates periodic
interest rate.
@@®@(@@@ 0.67 Multiplies by fraction
of a period.
DoT 30.00 Calculates amount of
simple interest owed
for odd period.
Ga» 4,530.00 Adds this simple
interest to present
value.
8: Additional Examples 103