Step 2. Calculate the balloon payment after 4 years.
894.33 & | | Stores rounded PMT value |
for exact payment amount (no fractional cents).*
4 @ | | | Figures and stores number |
|
|
| of payments in 4 years. |
Calculates balloon payment after four years. This amount plus last monthly payment repays the loan.
Savings Calculations
Example: A Savings Account. You deposit $2,000 into a savings account that pays 7.2% annual interest, compounded annually. If you make no other deposits into the account, how long will it take for the account to grow to $3,000? Since this account has no regular payments (PMT=0), the payment mode (End or Begin) is irrelevant.
3,000
0
7.2 1
_2,000
*The PMT stored in the previous step is the
5: Time Value of Money 71
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