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Finance app 287
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Finance app
The Finance app enables you to solve time-value-of-money
(TVM) and amortization problems. You can use the app to
do compound interest calculations and to create
amortization tables.
Compound interest is accumulative interest, that is, interest
on interest already earned. The interest earned on a given
principal is added to the principal at specified
compounding periods, and then the combined amount
earns interest at a certain rate. Financial calculations
involving compound interest include savings accounts,
mortgages, pension funds, leases, and annuities.
Getting Started with the Finance app
Suppose you finance the purchase of a car with a 5-year
loan at 5.5% annual interest, compounded monthly. The
purchase price of the car is $19,500, and the down
payment is $3,000. First, what are the required monthly
payments? Second, what is the largest loan you can
afford if your maximum monthly payment is $300?
Assume that the payments start at the end of the first
period.
1. Start the Finance app.
I
Select Finance
The app opens in the Numeric view.
2. In the
N field, enter
5
s12 and press
E
.
Notice that the result
of the calculation
(60) appears in the
field. This is the
number of months over a five-year period.