The payment calculation is a straightforward TVM payment calculation using the new amount as the PV.

Set to End mode. Press \¯if BEGIN annunciator is displayed.

Table 13-25 Calculating the payment

KeysDisplay Description

]OJ

0.00

Clears TVM registers.

 

 

 

 

JG\Í

12.00

Sets payments per year.

 

 

 

 

gGVJ:7GG

 

your new payment is calculated.

 

82,510.22

Stores loan amount on which

Ï

 

 

 

 

 

d7VÒ

9.50

Stores interest rate.

 

 

 

 

:É

0.00

Stores final balance.

 

 

 

 

JV\Ú

180.00

Stores number of monthly

 

payments you will make.

 

 

 

Ì

-861.59

Calculates your new payment.

 

Then, to calculate the lender’s return, enter cash flows that represent the complete picture of the wrap-around mortgage from the lender’s point of view:

Figure 22 Cash flow diagram (Wrap-around mortgage)

When you group the above cash flows, you’ll find that:

CF0 = 47,510.22 - 82,510.22 = -35,000

CF1 = 861.59 - 754.00 = 107.59

Additional Examples 153