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HP 10bII+ User Manual Page 73

Financial calculator.
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Table 6-5 Calculating the maximum purchase price
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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

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