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U
SER’S GUIDE — 53
ARM Payment — Using Lifetime Cap
Using the previous mortgage, add a lifetime cap of 4% and find the
adjusted payments through year six. You will need to re-enter the
loan amount, term and interest.
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter Loan Amount 1 7 6 ) l 176,000.00
Enter Term in years 3 0 T 30.00
Enter annual Interest rate 8 • 2 5 ˆ 8.25
Find monthly P&I Payment
(1st year) p “run” 1,322.23
Enter interest cap 4 s % CAP ARM 4.00%
Enter ARM parameters 1 : 1 A 1.00 - 1.00
Find 1st adjusted (2nd year)
ARM payment A 1 ARM 1,445.79
Find 2nd adjusted (3rd year)
ARM payment A 2 ARM 1,570.86
Find 3rd adjusted (4th year)
ARM payment A 3 ARM 1,697.07
Find 4th adjusted (5th year)
ARM payment* A 4 ARM 1,824.09
Find 5th adjusted (6th year)
ARM payment* A 5 ARM 1,824.09
Find principal at start of
6th year ® l 170,198.79
Find current Interest rate ® ˆ 12.25
Find remaining Term ® T 25.00
Reset interest cap to zero 0 s % CAP ARM 0.00%
*Note that the payment for 4th and 5th adjustments (corresponding to the 5th and 6th
years) is the same because the lifetime cap was reached on the 4th adjustment. An
“M” for “maximum” will appear at the bottom of the display once the Cap is reached.
Be sure to set the Cap back to “0” by pressing 0 s % before starting a new ARM
problem.
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