Section 3: Basic Financial Functions 43
Because the calculator rounds the calculated value of n up to the next higher
integer, in the preceding example it is likely that – while 328 payments will be
required to pay off the loan – only 327 full payments of $325 will be required,
the next and final payment being less than $325. You can calculate the final,
fractional, 328th payment as follows:
Alternatively, you could make the fractional payment together with the 327th
payment. (Doing so will result in a somewhat smaller total of all payments, since
you will not have to pay interest during the 328th payment period.) You can
calculate this final, larger, 327th payment (essentially a balloon payment) as
follows:
Instead of having a fractional (or balloon) payment at the end of the loan, you
might wish to make 327 or 328 equal payments. Refer to “Calculating the
Payment Amount” on page 48 for a complete description of this procedure.
Example 2: You’re opening a savings account today (the middle of the month)
with a $775 deposit. The account pays 6Ľ% interest compounded semimonthly.
If you make semimonthly deposits of $50 beginning next month, how long will it
take for your account to reach $4000?
Keystrokes (RPN mode) Display
328n
328.00
Stores total number of payments.
a
a You could skip this step, since 328 is already stored in the n register. If you do so, how-
ever, you will need to press M twice in the next step (for the reason discussed in the
first footnote on page 34; you would not have to press M twice if you had not pressed
12z after w in the example above.) We choose to show this and the following exam-
ple in a parallel format so that the procedure is easy to remember: the number you key
is the number of the final payment—either the fractional payment or the balloon pay-
ment—whose amount is to be calculated.
M
181.89
Calculates FV – which equals the
overpayment if 328 full payments
were made.
:P
–325.00
Recalls payment amount.
+
–143.11
Final, fractional payment.
Keystrokes (RPN mode) Display
327n
327.00
Stores number of full payments.
M
–141.87
Calculates FV – which is the
balance remaining after 327 full
payments.
:P
–325.00
Recalls payment amount.
+
–466.87
Final, balloon payment.
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