HP 12c Platinum Owner's Handbook

Section 12: Real Estate and Lending 125
Example 1: A lender wishes to induce the borrower to prepay a low interest rate
loan. The interest rate is 5% with 72 payments remaining of $137.17 and a
balloon payment at the end of the sixth year of $2000. If the lender is willing to
discount the future payments at 9%, how much would the borrower need to
prepay the note?
Example 2: A 9½% mortgage with 26 years remaining and a remaining balance
of $49,350 is available for purchase. Determine the price to pay for this
mortgage if the desired yield is 12%. (Since the payment amount is not given, it
must be calculated.)
Yield of a Mortgage Traded at a Discount or
Premium
The annual yield of a mortgage bought at a discount or premium can be
calculated given the original mortgage amount, interest rate, and periodic
Keystrokes (RPN mode) Display
gÂ
fCLEARG
72n
72.00
Months (into n).
9gC
0.75
Discount rate (into i).
137.17P
a
a Note that the payments are positive because this problem in seen from the viewpoint of
the lender who will be receiving payments. The negative PV indicates money that was
lent out.
137.17
Monthly payments (into PMT).
2000M$
–8,777.61
Amount necessary to prepay the
note.
Keystrokes Display
gÂ
fCLEARG
26gA
312.00
Months (into n).
9.5gC
0.79
Percent monthly interest rate (into
i).
49350Þ$P
427.17
Monthly payment to be received
(calculated).
12gC
1.00
Desired monthly interest rate (into
i).
$
–40,801.57
Purchase price to achieve the
desired yield (calculated).

HP 12c Platinum Specifications

General

Digits	10 digits
Battery type	CR2032
Type	Financial
Form factor	Pocket

Weight and Dimensions

Weight	110 g
Dimensions (WxDxH)	79 x 129 x 15 mm