How to Solve the Problem with a Non- Annual Periods

(Using the Texas Instrument BAII Plus)

The problems we have solved all have annual periods, however in life this rarely is the case. To begin with instead of think of periods as years lets consider them as periods. Periods can be any period of time: day, month quarter or year are the most common.

Let’s say you’re going to purchase a new home on a 30-year mortgage

The calculator will do the math if you enter 12X 30 which could be (12 X 30) or 360 in the N

Here is our example.

Your offer of $312,500 dollars has been accepted and you put $5,000 down for earnest money.

You will also send Escrow the remainder of the $15,000 you had saved for the downpayment.

$312,500 – $15000 = $297,500 for PV $297,500

N = (12 X 30)

I/Y= (7/12)

PV = $297,500

FV = 0

After entering those amounts in the proper key enter CPT then PMT = $1,979.28

The monthly payment is $1,979.28

This is an estimated outcome. Ours will neve be exactly the same as the lending institutions because they will charge different fees and enter their data slightly different.

The nice thing about this process is that you can use the information to solve what you’ll own when.

Let’s say you’ve made you payment for 7.5 years so 7.5 X 12 = 90 and 360 – 90 is 270

N = 270

I/Y = (7/12)

PMT = 1979.28

FV = 0

CPT/PV= $268,744.27

When you first begin pay for your home most of your payment goes towards the interest as you continue this slowly changes to where most of the payment goes toward the principle of the loan. That fact is why paying a little extra reduces your time for paying off the home so much.

Note: Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California.