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25
Calculating basic loan payments
Calculate the quarterly payment for a $56,000 mortgage loan
at 6.5% compounded quarterly during its 20-year amortization
period.
I/Y = 6.5%
N = 4 × 20 years = 80
......
PV = $56,000
FV = 0
PMT = ?
Procedure Key operation Display
Set all the variables to
default values.
.
b
000
Make sure ordinary annuity is set (BGN is not displayed).
Set the number of pay-
ments per year to 4.
.
w
4
Q
P/Y=
400
Confi rm the number of
compounding periods per
year.
i
C/Y=
400
Quit the P/Y and C/Y set-
tings.
s
000
Calculate the total
number of payments and
store in N.
20
.
<
N
ANS~N
8000
Enter the present value.
56000
v
56———~PV
5600000
Enter the future value.
0
T
—~FV
000
Enter the annual interest
rate.
6.5
f
6.5~I/Y
650
Calculate the quarterly
payment.
@
u
PMT=
-125586
Answer: The quarterly payments are $1,255.86.
2
3FinancialFunctionsCurrent.indd253FinancialFunctionsCurrent.indd25 06.7.108:38:15PM06.7.108:38:15PM
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