Section 12: Real Estate and Lending 123
Example 1: A borrower is charged 2 points for the issuance of his mortgage. If
the mortgage amount is $60,000 for 30 years and the interest rate is 11½% per
year, with monthly payments, what true annual percentage rate is the borrower
paying? (One point is equal to 1% of the mortgage amount.)
Example 2: Using the same information as given in example 1, calculate the
APR if the mortgage fee is $150 instead of a percentage.
Keystrokes (RPN mode) Display
gÂ
fCLEARG
30gA
360.00
Months (into n)
11.5gC
0.96
Percent monthly interest rate (into
i).
60000$
60,000.00
Loan amount (into PV).
P
–594.17
Monthly payment (calculated).
:$2b-$
58,800.00
Actual amount received by
borrower (into PV).
¼
0.98
Percent monthly interest rate
(calculated).
12§
11.76
Annual percentage rate.
Keystrokes (RPN mode) Display
gÂ
fCLEARG
30gA
360.00
Months (into n)
11.5gC
0.96
Percent monthly interest rate (into
i).
60000$
60,000.00
Loan amount (into PV).
P
–594.17
Monthly payment (calculated).
:$150-$
59,850.00
Effective mortgage amount (into
PV).
¼
0.96
Monthly interest rate (calculated).
12§
11.53
Annual percentage rate.
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