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Balloon Payment/Remaining Balance Needed to Pay Off a Loan
You’re looking at a new home with the following financing available:
Loan amount $225,000 at 6.75% amortized over 30 years but due
and payable after 10 years. What is the balloon payment (remaining
balance) after 10 years?
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter the loan amount 2 2 5 ) l 225,000.00
Enter interest 6 • 7 5 ˆ 6.75
Enter term 3 0 T 30.00
Find monthly payment p “run” 1,459.35
Find balloon/remaining balance
after 10 years 1 0 s a “run” 191,927.25
Bi-Weekly Loans
Your calculator includes a Bi-Weekly loan function (s T) that
allows you to convert established, fully amortized monthly loans into
Bi-Weeklies (in which one-half the monthly payment is made every
two weeks). Because you make two extra half-payments per year
(i.e., 26 Bi-Weekly payments is like making 13 payments/year),
these kinds of loans can amount to large interest savings and a sub-
stantial reduction in the time it takes to pay them off.
You begin these problems by setting up the initial monthly loan and
then pressing s T. The first press of T displays the Bi-Weekly
term, the second press shows the total interest
savings
over the entire
loan, a third press calculates the total interest paid, a fourth press
shows the total principal paid, and a fifth press shows the total prin-
cipal and interest. Press the p key to find the Bi-Weekly payment.
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