HP 10bII - Page 58

Example: A Mortgage With a Balloon Payment. You’ve obtained a
25 year, $172,500 mortgage at 8.8% annual interest. You anticipate that
you will own the house for four years and then sell it, repaying the loan
with a balloon payment. What will your balloon payment be?
Solve this problem using two steps:
1. Calculate the loan payment using a 25 year term.
2. Calculate the remaining balance after 4 years.
Step 1. First calculate the loan payment using a 25 year term.
PV=172500
WR - 8896
N=25x12
PIYR=12
1 2 DN 299 | 300
PMT =?
End Mode
Set to End mode. Press Q@9 if BEGIN annunciator is displayed.
Keys: Display: Description:
OOOH
12.00
Sets
periods
per
year.
ODOC
300.00
Stores
length
of
mortgage
(25
х
12
=
300
months).
Ow 0.00 Stores loan balance
after 25 years.
@0@@@@@ 172,500.00 Stores original loan
balance.
(@С)@@® 8.80 Stores annual interest
Tate.
—1,424.06
Calculates
monthly
payment.
58 5: Time Value of Money Calculations