# How to Use the HP 10B11 Financial Calculator

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You may use your HP 10BII calculator for a wide variety of tasks, whether to evaluate investments or make everyday calculations. To make common real estate calculations such as mortgage payments, note the keys operative to that particular calculation. Time value of money (TVM) keys come into play often in real estate calculations, including N, which stores the number of periods the investment is compounded or discounted, and PMT, denoting the payment per period.

## Loan Calculations

The HP 10BII calculator is designed to handle a wide range of loan calculations. Say you want your monthly mortgage payment to be \$900. To find your maximum home purchase price under that condition, have the following information on hand to input: the period per year (12) and the length of the mortgage (30 years).

Set to End mode, referring to payments made at the end of the period, by pressing the down-shift button and the MAR Beg/End key. For the period, press 12, down-shift, PMT P/YR. For mortgage length, press 30, down-shift, N xP/YR. Then press 0, then FV, designating full payoff. Store the interest rate, 5 percent, via the I/YR button, then the desired mortgage payment, via the +/- key then PMT, followed by pressing PV, which gives you the loan amount you can afford. With no down payment, that figure should be \$167,653.

## Amortization

You can create an amortization table for a mortgage or other loan by plugging in values, followed by the button corresponding to what the value represents. For example, to find the required loan payment for a 15-year loan of \$200,000 with an interest rate of 4 percent, set the calculator to End mode and ascertain that P/YR is set to one payment per year. Key in 15, then the N button; 4, followed by the I/YR button; 200,000, then the PV button; followed by 0 and FV. Pressing PMT calculates the amount. To display the amount of principal repaid and the amount of interest paid in the first year, press 1, INPUT, the orange shift key, AMORT.

Using the above figures, \$9,933 of principal will have been paid in year 1, and \$7,819 paid in interest.

## Annual Percentage Rate

When mortgage broker fees complicate the picture, you are paying more for your mortgage than your interest rate would suggest. In this case, you can figure out your annual percentage rate, or APR, inclusive of the fees.

Set to End mode. Set the payments per year. Store the interest rate (7 percent), the length of the mortgage (30 years), and the original mortgage amount. Press 0, then FV. Hit PMT for the payment amount. Subtract the fees from the loan amount, then press I/YR for the APR.

For a loan of \$200,000 and closing costs of \$4,800, the APR would be 7.237 percent.

## What If ... TVM

For time value of money calculations involving compounded interest and regular uniform payments, you can entertain different scenarios and the results for each. If you've already made a TVM calculation for a desired monthly payment, you can reuse pre-existing information; just type in the new desired payment amount, then the +/- key, followed by PMT, which should then display the value as a negative, to denote a payout. Pressing PV would then show how much you can borrow under the new parameters.

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