HP 10B - Manual (Page 105)

Example: Interest-Only Loan With Fee«
A $1,000,000, lO-ycar,
12 % (annual interest) intcrest^oniy loan has an origination fee of three
points. What is the yield to the lender? Assume that monthly payments of
interest arc made.
Set to End mode. Press | if BEGIN annunciator is displayed.
Keys: Display: Description:
121(EZ
y
H)
12 G
101
Ш
12.00
12.00
120.00
1000000 fPVl 1,000.000.00
mm
-
1
.
000
,
000.00
szn -
10
,
000.00
iRCP fPVI
дз® [ЁЗ
1
,
000
,
000.00
970,000.00
12.53
Sets payments per year.
Stores interest rate.
Stores length of
mortgage.
Stores original amount of
mortgage.
Enters amount due at
end of term. Payments
arc interest only so entire
loan amount is due.
CalcuKatcs inlcrc.sl-only
payments.
Recalls loan amount.
Subtracts points.
Calculates APR.
Loan With a Partial (Odd) First Period
TVM calculations apply to financial transactions where each payment
period is the same length. However, situations exist where the first pay­
ment period is not the same length as the remaining periods. This first
period is sometimes called an odd or partial first period.
If interest is applied to an odd first period, it is usually calculated as sim­
ple interest. So using the HP-lOB to do a payment calculation with an odd
first period is a two step process;
102 8: Additional Examples