HP 10B - Manual (Page 109)

What if ... TVM Calculations
One of the mosl valuable aspects of (he HP-10B*sTVM application is the
ease with which it handles the question ‘'what i f . . i n financial calcula­
tions. For example, one of the most popular “what if.. questions is,
“What if the interest rate changes to...? How will that affect my pay­
ment?” To answer this question, once you have calculated a payment
based on one interest rate, all you need to do is enter the new interest rate
and recalculate PMT,
Some of the examples earlier in this manual have included some brief
encounters with “what if..questions, but a more complete example
follows.
Example.
You are about to sign on the dotted line for a 30-year,
$735,000 mortgage, on a vacation home. The annual interest rate is 11.2%.
Part 1
. What will your payments be at the end of the month?
Set to End mode. Press
Keys:
121(
p
Z
yr
)
735000 fPVl
11.2 OZ y U
30 BlxP/YRI
om
Display:
12.00
if BEGIN annunciator is displayed.
Description:
Sets payments per year.
Stores known values.
0.00
-7,110.88 Calculates payment.
Part 2.
Your company’s regular payroll is generated every other Friday.
The bank agrees to automatically draw payments of $3,555.00 out of each
paycheck (approximately half of what a monthly payment would be) and
adjust the payment period accordingly (26 compounding periods per
year). What would be the new term of the loan?
3555 iPMTl
26 II p T yr I
-3,555.00
26.00
Enters new payment.
Sct.s payments per year
for every two weeks.
106 8: Additional Examplaa