HP 10bII+ User Manual page 73

Set to End mode. Press
Table 6-5 Calculating the maximum purchase price
Keys
JG\Í
D:\Ú
:É
j7VÒ
dD:yÌ
Ï
1JG:::4
Example: A Mortgage With a Balloon Payment
You've obtained a 25 year, 172,500 mortgage at 8.8% annual interest. You anticipate that
you will own the house for four years and then sell it, repaying the loan with a balloon
payment. What will your balloon payment be?
Solve this problem using two steps:
1. Calculate the loan payment using a 25 year term.
2. Calculate the remaining balance after 4 years.
Step 1
First calculate the loan payment using a 25 year term.
\¯
if BEGIN annunciator is displayed.
133,006.39
145,006.39
Display Description
12.00 Sets periods per year.
360.00 Stores the length of the
mortgage (30 × 12).
0.00 Pays mortgage off in 30 years.
7.50 Stores interest rate.
-930.00 Stores desired payment (money
paid out is negative).
Calculates the loan you can
afford with a 930 payment.
Adds 12,000 down payment
for the total purchase price.
Time Value of Money Calculations
65