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Finance app 293
Calculating amortizations
Amortization calculations determine the amounts applied
towards the principal and interest in a payment, or series
of payments. They also use TVM variables.
To calculate amortizations:
1. Start the Finance app.
2. Specify the number of payments per year (P/YR).
3. Specify whether payments are made at the beginning
or end of periods.
4. Enter values for I%YR, PV, PMT, and FV.
5. Enter the number of payments per amortization
period in the Group Size field. By default, the
group size is 12 to reflect annual amortization.
6. Tap . The calculator displays an amortization
table. For each amortization period, the table shows
the amounts applied to interest and principal, as well
as the remaining balance of the loan.
Example:
Amortization for a
home mortgage
Using the data from the previous example of a home
mortgage with balloon payment (see page 291), calculate
how much has been applied to the principal, how much
has been paid in interest, and the balance remaining after
the first 10 years (that is, after 12 × 10 = 120 payments).
1. Make your data
match that shown in
the figure to the right.