Time Value of Money Calculations64
Part 3
If interest is 10.5%, what is the maximum you can spend on the car to lower your car payment
to 375.00?
Example: A Home Mortgage
You decide that the maximum monthly mortgage payment you can afford is 930.00. You can
make a 12,000 down payment, and annual interest rates are currently 7.5%. If you obtain a
30 year mortgage, what is the maximum purchase price you can afford?
Figure 8 Cash flow diagram (Calculate PV)
Table 6-3 Calculating the interest rate
Keys Display Description
1V:Ì
-372.53 Decreases payment from 422.53.
Ò
2.03 Calculates annual interest rate for
the reduced payment.
Table 6-4 Calculating the amount
Keys Display Description
J:7VÒ
10.50 Stores original interest rate.
DjVyÌ
-375.00 Stores desired payment.
Ï
11,537.59 Calculates amount of money to
finance.
1JV::4
13,037.59 Adds the down payment to the
amount financed for total price
of the car.
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