Doing Amortization with AMRT
QED Education Scientific
6
SOLVE
AMRT
1
EXE
2
EXE
SOLVE
3
4
EXE
CMPD
0
2
EXE
9
4
EXE
7
0
(
─
)
0
EXE
0
1
EXE
2
EXE
1
2
0
0
Now scroll up to select [PMT] and solve it.
The monthly payment is about $1017.84. Next, to find the total interest paid in the
second year.
Enter AMRT mode and scroll down to enter 13 for [PM1] and 24 for [PM2].
Scroll down further to select [
∑
INT:Solve] and solve it.
The interest paid in the second year is $550.93.
Note that we entered 13, not 12, for PM1. This is due to the definition of PM1 (see
page E-56 of User Guide.)
█
Interest rate of mortgage tends to change accordingly and this can affect the total
repayment amount, as well as the length of time needed to repay the debt.
Example 4
►
>>
QED Finance issues mortgages where payments are determined
by interest rate that prevails on the day the loan is made. The monthly payments do
not change although the interest rate varies according to market forces. However,
the duration required to repay the loan will change accordingly as a result of this.
Suppose a person takes out a 20-year, $70,000 mortgage at
%
9
12
=
j
. After exactly
2 years interest rates change. Find the duration of the loan and the final smaller
payment if the new interest rate stays fixed at
%
10
12
=
j
.
Operation
First we should find the monthly payment of the loan.
Enter CMPD mode, make sure calculator displays [Set:End]. Then scroll down
and enter 240 for [n], 9 for [
I%
], (-)70000 for [PV], 0 for [FV], 12 for [P/Y] and [C/Y].
Output: PMT = 1017.842337
•
•
•
Output: ∑INT = 550.9318646
Screenshot from Casio TVM
