54 Section 3: Basic Financial FunctionsAmortization

The hp 12c enables you to calculate the amounts applied toward principal and toward interest from a single loan payment or from several payments, and also tells you the remaining balance of the loan after the payments are made.*

To obtain an amortization schedule:

1.Press fCLEARGto clear the financial registers.

2.Enter the periodic interest rate, using ¼or C.

3.Enter the amount of the loan (the principal), using $.

4.Key in the periodic payment, then press ÞP (the sign of PMT must be negative, in accordance with the cash flow sign convention).

5.Press g× or (for most direct reduction loans) g to set the payment mode.6.Key in the number of payments to be amortized.7.Press f! to display the amount from those payments applied toward interest.

8.Press ~ to display the amount from those payments applied toward the principal.

9.To display the number of payments just amortized, press dd.10.To display the remaining balance of the loan, press :$.11.To display the total number of payments amortized, press :n.

Example: For a house you’re about to buy, you can obtain a 25-year mortgage for $50,000 at 131/4% annual interest. This requires payments of $573.35 (at the end of each month). Find the amounts that would be applied to interest and to the principal from the first year’s payments.

Keystrokes

Display

 

fCLEARG

1.10

Enters i.
13.25gC
50000$50,000.00Enters PV.

*All amounts calculated when f! is pressed are automatically rounded to the number of decimal places specified by the display format. (The display format is described in Section 5.) This rounding affects the number inside the calculator as well as how the number appears in the display. The amounts calculated on your hp 12c may differ from those on the statements of lending institutions by a few cents, since different rounding techniques are sometimes used. To calculate answers rounded to a different number of decimal places, press ffollowed by the number of decimal places desired before you press f!.

File name: hp 12c_user's guide_English_HDPMBF12E44

Page: 54 of 209

Printered Date: 2005/7/29

Dimension: 14.8 cm x 21 cm