Example Using a Solver Function (USPV): Calculations for a Loan with an Odd First Period. Suppose an auto purchase is financed with a $6,000 loan at 13.5% annual interest. There are 36 monthly payments starting in one month and five days. What is the payment amount?
Use the following formula when the time until the first payment is more than one month but less than two months. Interest for this odd
The formula for this loan is:
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| 1200 |
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PV 1 | + |
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where:
ANNI＝ the annual percentage interest rate. N＝ the number of payment periods.
DAYS＝ the number of leftover, odd days (an integer from 0 through 30).
PV＝ the amount of the loan. PMT＝ the monthly payment.
The formula can be rearranged and simplified using USPV, the Solver function for returning the present value of a uniform series of payments:
The keystrokes are:
PV *(1 +ANNI /1200 *DAYS /30 )
+PMT *USPV (ANNI /12:N )=0
172 12: The Equation Solver
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