HP 12C manual Number of periods and monthly

If you, as a lender, know the yield on the entire transaction, and you wish to obtain the payment amount on the wrap-around mortgage to achieve this yield, use the following procedure. Once the monthly payment is known, the borrower's periodic interest rate may also be determined.

1.Press the and press CLEAR .

2.Key in the remaining periods of the original mortgage and press .

3.Key in the desired annual yield and press .

4.Key in the monthly payment to be made by the lender on the original

mortgage and press .

5.Press .

6.Key in the net amount of cash advanced and press .

7.Key in the total term of the wrap-around mortgage and press .

8.If a balloon payment exists, key it in and press .

9.Press to obtain the payment amount necessary to achieve the desired yield.

10.Key in the amount of the wrap-around mortgage and press

to obtain the borrower's periodic interest rate.

Example 3: Your firm has determined that the yield on a wrap-around mortgage should be 12% annually. In the previous example, what monthly payment must be received to achieve this yield on a $200,000 wrap- around? What interest rate is the borrower paying?

Keystrokes Display

	CLEAR		Number of periods and monthly
			interest rate.
200	12
1051.61			Present value of payments plus cash
	74990	-165,776.92
			advanced.
240		1,693.97	Monthly payment received by lender
129963.35
2000		9.58	Annual interest rate paid by borrower.

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