Additional Examples
143
Example: Interest-Only Loan With Fee
A 1,000,000, 10-year, 12% (annual interest) interest-only loan has an origination fee of three
points. What is the yield to the lender? Assume that monthly payments of interest are made.
Set to End mode. Press \¯ if BEGIN annunciator is displayed.
D:\Ú
360.00 Stores length of mortgage.
JS::::Ï
160,000.00 Stores original amount of
mortgage.
:É
0.00 The loan will be completely paid
off in 30 years.
Ì
-1,230.26 Calculates payment.
vÏ
160,000.00 Recalls loan amount.
-
AG§Ï
156,800 Subtracts points.
Ò
8.72 Calculates APR, considering
fees.
Table 13-12 Calculating the annual percentage rate
Keys Display Description
JG\Í
12.00 Sets payments per year.
JGÒ
12.00 Stores interest rate.
J:\Ú
120.00 Stores length of mortgage.
J::::::
Ï
1,000,000.00 Stores original amount of
mortgage.
yÉ
-1,000,000.00 Enters amount due at end of
term. Payments are interest only
so entire loan amount is due.
Ì
-10,000.00 Calculates interest-only
payments.
vÏ
1,000,000.00 Recalls loan amount.
AD§Ï
970,000.00 Subtracts points.
Table 13-11 Calculating the annual percentage rate considering fees
Keys Display Description
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