48 — Q
UALIFIER
P
LUS
®
III
X
Prepaid/Odd-Days Interest and APR
Find the monthly payment on a $100,000 loan at 8.25% annual
interest and 30-year term. Then, find the amount of odd-days inter-
est, or “prepaid” interest due, if the escrow closes on 7/21/03 and
the first payment is due 8/1/03.
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter loan amount 1 0 0 ) l 100,000.00
Enter interest 8 • 2 5 ˆ 8.25
Enter term 3 0 T 30.00
Find monthly P&I payment p “run” 751.27
Find days between escrow closing and
date of 1st payment 8 : 1 : 0 3 – 7 : 2 1
: 0 3 = 11.00
Find the prepaid interest
due at closing s : 252.08*
*Note: This is based on a 360-day year, as most banks use this method for comput-
ing prepaid interest.
— DO NOT CLEAR CALCULATOR —
Now, without clearing the calculator, add the prepaid interest to the
loan's points and fees if they are equal to 1.5% and $500, respec-
tively. Then find the Annual Percentage Rate (APR), based on these
closing costs.
STEPS KEYSTROKES DISPLAY
Store the prepaid interest
in memory µ 252.08
Find Loan Costs:
Recall loan amount ® l 100,000.00
Find point cost x 1 • 5 % = 1,500.00
Add fees + 5 0 0 = 2,000.00
Add prepaid interest
stored in memory + ® µ = 2,252.08
Find APR for this loan s ˆ “run” 8.50
Clear All s x “All Cleared” 0.00
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