Calculated Industries 3442 - Manual (Page 70)

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Pick-A-Payment Loan (Zero-Month/30-Term) vs.
Standard Fixed-Rate Loan —
Entering a Starting Interest
Rate %, Changing ROI% and Payment Cap%, Solving
Payment Options
You’d like to show your client the savings of a Zero-month/30-term P-A-P
loan with a starting interest rate of 3.95% over that of a fixed-rate loan.
Find the P-A-P loan payments for a 10-year recast, the 5-year P-A-P
savings and ROI% investment savings, and the total cost of the loan.
Lower the ROI from 10% to 7% and the Payment Cap% from 7.5% to
5%. Also, in this problem, find the interest-only payment, the 30- and
15-year loan payments (based on the P-A-P Note%). Additionally,
find the deferred interest (resulting from negative amortization).
You have the following loan parameters:
FIXED-RATE LOAN P-A-P LOAN
Loan Amount 300,000 300,000
Interest/Start Payment 7.5% 3.95% (Start%)
7.50% (Note%)
Term 30 0 (Start No. of Mo.’s)
30 years
ROI% -- 7%
Pmt Cap % -- 5%
STEPS KEYSTROKES DISPLAY
1. Enter Fixed-Rate Loan Values:
Clear All s x “All Cleared” 0.00
Enter loan amount 3 0 0 ) l 300,000.00
Enter interest rate 7 • 5 ˆ 7.50
Enter term 3 0 T 30.00
2. Solve for Fixed-Rate Loan Payment and Total Cost:
Find monthly P&I payment p 2,097.64
Amortize the loan a 1-360
Find total interest a 455,151.67
Find total principal a 300,000.00
Find total principal/interest a 755,151.67*
3. Enter P-A-P Loan Values:
Enter Start Rate term
(in months) 0 ß 0.00
Enter P-A-P term
(in years) 3 0 s ß 30.00
Enter Start interest % 3 • 9 5 S 3.95
Calculate Start Payment S 1,423.61
Enter P-A-P actual rate
(Note%) 7 • 5 s S 7.50
Enter ROI% 7 s % 7.00
Enter Payment Cap% 5 s 6 5.00
(Cont’d)