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1. Key in the program.
2. Key in the number of months in the loan and press .
3. Key in the payment number when prepayment occurs and press
.
4. Key in the total finance charge and press to obtain the unearned
interest (rebate).
5. Key in the periodic payment amount and press to find the amount of
principal outstanding.
6. For a new case return to step 2.
Graduated Payment Mortgages
The Graduated Payment Mortgage is designed to meet the needs of
young home buyers who currently cannot afford high mortgage payments,
but who have the potential of increasing earning in the years on come.
Under the Graduated Payment Mortgage plan, the payments increase by
a fixed percentage at the end of each year for a specified number of years.
Thereafter, the payment amount remains constant for remaining life of the
mortgage.
The result is that the borrower pays a reduced payment (a payment which
is less than a traditional mortgage payment) in the early years, and in the
later years makes larger payments than he would with a traditional loan.
Over the entire term of the mortgage, the borrower would pay more than
he would with conventional financing.
Given the term of the mortgage (in years), the annual percentage rate, the
loan amount, the percentage that the payments increase, and the number
of years that the payments increase, the following HP-12C program
determines the monthly payments and remaining balance for each year
until the level payment is reached.
PV: Unused PMT: Unused
FV: Unused
R
0
: Fin. charge
R
1
: Payment# R
2
: # moths
R
3
-R
.6
: Unused
Keystrokes Display
30
25
180
5.81 Rebate.
39.33
190.84 Outstanding principal.