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Decreasing ARM Payment
Calculate the initial monthly payment on a 30-year, $250,000 ARM
loan at 5% interest, and then find the second and third years' adjust-
ed payments if the loan's interest rate decreases 1% at the end of
each year.
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter loan amount 2 5 0 ) l 250,000.00
Enter term in years 3 0 T 30.00
Enter annual interest 5 ˆ 5.00
Find initial monthly payment
p “run” 1,342.05
Enter ARM parameters 1 : 1 s A -1.00 - 1.00
Find 1st lower ARM
payment* A 1 ARM 1,197.01
Find 2nd lower ARM
payment* A 2 ARM 1,064.20
*For second and third year payments.
Increasing and Decreasing ARM Payment
Find the ARM payments for a $300,000, 30-year ARM loan that
starts out at 5% but increases 1% after six months and then
decreases 1.5% after an additional 12 months.
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter loan amount 3 0 0 ) l 300,000.00
Enter term in years 3 0 T 30.00
Enter annual interest 5 ˆ 5.00
Find initial monthly
payment p “run” 1,610.46
Enter 1st ARM adjustment 1 : • 5 A 1.00 - 0.50
Find higher ARM payment A 1 ARM 1,796.41
Enter 2nd ARM adjustment 1 • 5 : 1 s A -1.50 - 1.00
Find lower ARM payment A “run” 1 ARM 1,527.15
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