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Unformatted text preview: Example: TVM/Amortization Application
This twopart example shows you how to use the TVM and Amortization
worksheets to compute the monthly payment on a 30year loan and then
generate an amortization schedule for the first three years of the loan. Example: Part 1
Using the TVM worksheet, determine the monthly payment on a 30year
mortgage with a loan amount of $120,000 and an annual percentage rate of
9.125%.
Procedure Keystrokes Display Clear TVM worksheet.
0.00
If necessary, set
payments per year to 12. 12 P/Y = If necessary, select endofperiod payments. END Return to standardcalculator mode. 12.00 0.00 Enter loan amount. 120000 PV = 120,000.00 Enter interest rate. 9.125 I/Y = 9.13 Enter number of
payments. 30
, N= 360.00 PMT = 976.36 Compute payment. The computed monthly payment is $976.36. Because PMT is money paid
out, it is displayed as a negative number. 26 Chapter 2: Using the TVM and Amortization Worksheets Example: Part 2
Use the Amortization worksheet to generate an amortization schedule for
the first three years of the loan.
Assume that the first payment is in April; therefore, the first year has 9
payment periods. There are 12 payment periods per year thereafter.
Procedure Keystrokes Select Amortization
worksheet. \ Clear worksheet. Display
P1 (old contents)
P1 = 1.00 P2 = 9.00 Set ending period to 9.
9
View first year
amortization data. BAL =
PRN =
INT = 119,407.46
592.54
8,194.70 Change beginning period
to 10.
10 P1 = 10.00 Change ending period to
21 P2 = 21.00 View second year
amortization data. 21 BAL =
PRN =
INT = 118,551.85
855.61
10,860.71 Move to P1 and press
to enter next range
of payments P1 = 22.00 View P2. P2 = 33.00 View third year
amortization data. BAL =
PRN =
INT = 117,614.86
936.99
10,779.33 Note that the principal and interest are displayed as negative because they
are outflows. Chapter 2: Using the TVM and Amortization Worksheets 27 28 Chapter 2: Using the TVM and Amortization Worksheets CHAPTER 3
Using the Cash Flow Worksheet
Three keys are avai...
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 Summer '09
 PETRY

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