User Manual

76 Other Financial Tools
BEAR-CH3.DOC BA Real Estate Guidebook Bob Fedorisko Revised: 08/29/96 9:19 AM Printed: 09/28/99 1:21 PM
Page 76 of 20
Press
# ,
until the BGN indicator disappears.
Steps Keystrokes Display
Clear TVM values.
#
-
0.00
Set P/Y and C/Y to 12.
#
+
12
j
j
P/Y= 12.00
C/Y= 12.00
12.00
Enter the original
loan values.
30
0
12
1
104
q 2
TRM= 30.00
I% = 12.00
LN = 104,000.00
Compute payment.
$
3
PMT =
-
1,069.76
Find loan balance
after five years.
5
0
$ 4
TRM= 5.00
FV =
-
101,569.75
Replace original loan
with FV and clear FV.
t
2
r
4
LN = 101,569.75
FV = 0.00
Enter original term
and new rate.
30
0
8.5
1
TRM= 30.00
I% = 8.50
Compute new
payment.
$
3
PMT =
-
780.98
Start APR.
N
j
I% = 8.50
PTS= 0.00
Enter points and fee;
compute true APR.
2
j
500
j
PTS= 2.00
FEE= 0.00
FEE= 500.00
APR= 8.78
Exit APR.
!
8.78
Finding the APR of a Refinanced Loan
Five years ago, you purchased a home with a 30-year,
$104,000 mortgage loan at 12% annual interest. You can
now refinance the loan balance at 8.5% annual interest,
provided you pay 2 points plus a $500 fee. What is the
new monthly payment and the APR of the new loan?
Solution