4.Store the values you know. (Enter each number and press its menu key.)

5.To calculate a value, press the appropriate menu key.

You must give every variable—except the one you will calculate—a value, even if that value is zero. For example, FV must be set to zero when you are calculating the periodic payment (PMT) required to fully pay back a loan. There are two ways to set values to zero:

„Before storing any TVM values, press @cto clear the previous TVM values.

„Store zero; for example, pressing 0 sets FV to zero.

Loan Calculations

Three examples illustrate common loan calculations. (For amortization of loan payments, see page 77.) Loan calculations typically use End mode for payments.

Example:A Car Loan. You are financing the purchase of a new car with a 3-year loan at 10.5% annual interest, compounded monthly. The purchase price of the car is $7,250. Your down payment is $1,500. What are your monthly payments? (Assume payments start one month after purchase—in other words, at the end of the first period.) What interest rate would reduce your monthly payment by $10?

7,250 _ 1,500

0

 

 

10.5

 

 

 

3 X 12

 

 

 

12; End mode

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

2

 

 

 

35

36

 

 

 

 

 

 

 

 

 

 

5: Time Value of Money 67

File name : English-M02-1-040308(Print).doc Print data : 2004/3/9