Texas Instruments BA Real Estate - Paying off a Loan with Larger Payments

24 Mortgages and Amortization
BEAR-CH1.DOC BA Real Estate Guidebook Jackie Quiram Revised: 09/28/99 1:16 PM Printed: 09/28/99 1:16 PM
Page 24 of 36
Press
# ,
until the BGN indicator disappears.
Steps Keystrokes Display
Clear TVM values.
#
-
0.00
Set P/Y and C/Y to 12.
#
+
12
j
j
P/Y = 12.00
C/Y = 12.00
12.00
Enter term in years.
30
0
TRM= 30.00
Enter interest rate.
7.75
1
I% = 7.75
Enter loan amount.
125
q
2
LN = 125,000.00
Compute payment.
$
3
PMT=
-
895.52
A
dd extra payment
amount as a negative
v
alue.
a
100
t
-
100
Calculate and enter
new payment amount.
j
3
PMT=
-
995.52
Compute new term.
$
0
TRM= 21.56
Your client can pay off the loan in about 21.6 years.
Paying Off a Loan with Larger Payments
A client has just borrowed $125,000 for 30 years at 7.75%.
If she is able to increase her payment amount by $100
per month, how quickly can she pay the note off?
Solution