APR & Total Finance Charges
Solving for APR/TFC is done in two steps: (1) you set up the loan
just like any other problem (that is, enter three known variables
and solve for the fourth) and (2) combine points and fees and
press [Set] [Int] (APR) to solve APR, then press [Int] a second time
(in succession) to display the total finance charges, and a third
time to display total finance charges plus principal.
Note: APR for non-real estate loans (such as for autos and boats),
should not be solved using the following keystrokes, as methods for
solving differ.
APR Solution
You are taking out a real estate loan of $50,000 for 30 years at
a nominal or quoted rate of 9% interest. The cost of getting the
loan is quoted as 1.5 points and $250 in fees. What is the APR
and total finance charges when these costs are included?
Steps Keystrokes Display
Clear calculator [On/C] [On/C] 0.00
Enter loan amount 50,000 [L/A] 50,000.00
Enter interest 9 [Int] 9.00
Enter term 30 [Term] 30.00
Find monthly payment [Pmt] “run” 402.31
Find Loan Costs:
Recall loan amount [Rcl] [L/A] 50,000.00
Find point cost [x] 1.5 [%] [=] 750.00
Add fees & find total [+] 250 [=] 1,000.00
Find APR* [APR] “run” 9.23
Find total finance charges [Int] 95,832.07
* Note: Because APR is an interest calculation, it may take several
seconds to calculate.
31 – User’s Guide
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