HP 10B - Manual (Page 115)

m
SnZYBJO
GG91
345.505.61
(pg -23,368.11
Calculates amount in
account at retirement.
Calculates present-value
purchasing power of FV^
assuming an 8 % inflation
rate.
Cash Flow Examples
Wrap-Around Mortgages
A wrap-around mortgage is a combination of refinancing a mortgage and
borrowing against real estate equity. Usually the two unknown quantities
in the wrapped mortgage are the new payment and the rate of return to
the lender. To arrive at a solution, you need to use both the TVM and the
cash flow applications.
Example.
You have 82 monthly payments of $754 left on your 8 % mort­
gage, leaving a remaining balance of $47,510.22. You would like to wrap
that mortgage and borrow an additional $35,000 for anotlier investment.
You find a lender who is wilting to “wrap” an $82,510.22 mortgage at
9.5% for 15 years. What arc your new payments and what return is the
lender getting on this wrap-around mortgage?
The payment calculation Ls u straightforward TVM payment calculation
using the new amount as the PV.
Set to End mode. Press | if BEGIN annunciator is displayed.
Keys: Display: Description:
■rCLEAfi''AiXl 0.00 Clears all registers.
12aiP/VRl 12.00 Sets payments per year.
82510.22 82.510.22 Stores loan amount on
which your new payment
is calculated.
112 8: Additional Examples