7-5-2

Amortization

a : INTPM1 = I BALPM1–1⋅ i I ⋅ (PMT sign)

b : PRNPM1 = PMT + BALPM1–1⋅ i

c : BALPM2 = BALPM2–1 + PRNPM2

d : ΣPM2 PRN = PRNPM1 + PRNPM1+1 + … + PRNPM2

PM1

e : ΣPM2 INT = INTPM1 + INTPM1+1 + … + INTPM2

PM1

BAL0 = PV (INT1 = 0 and PRN1 = PMT at beginning of installment term)

uConverting between the nominal interest rate and effective interest rate

The nominal interest rate (I% value input by user) is converted to an effective interest rate (I%' ) for installment loans where the number of installments per year is different from the number of compound interest calculation periods.

I%' = {(1+

I%

 

[C / Y ]

}⋅100

 

[P / Y ]

 

 

) –1

100 ⋅ [C / Y ]

The following calculation is performed after conversion from the nominal interest rate to the effective interest rate, and the result is used for all subsequent calculations.

i= I%' ⎟100

Press 4(AMT) from the Financial 1 screen to display the following input screen for amortization.

4(AMT)

PM1..............................

first installment of installments 1 through n

PM2..............................

second installment of installments 1 through n

n ...................................

installments

I% ................................

interest rate

PV ................................

principal

PMT .............................

payment for each installment

FV ................................

balance following final installment

P/Y ...............................

installments per year

20070161001