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re: Using TVM on Financial Calculator
Posted on 8/4/15 at 3:39 pm to southernelite
Posted on 8/4/15 at 3:39 pm to southernelite
I don't think I'm explaining this correctly. Let's say I use your info..
n: 3
i/y: 2
pv: -3,200
fv: 0
P/Y: 1
Calculate PMT= 1,087.86
Multiply the annual payment by three years, and you get a total P&I of 3,263.57, which means positive net interest of 63.57.
63.57 of interest is 2% of the original loan, but that is a 0.66% annual rate of return. That's why i/y has to be 6% to get an annualized ~2% return.
When i/y is 6%, you get annual payments at 1,129.39, or $3,388.16 of total P&I. Positive net interest of 188.16 which is right around 2% when annualized ($62.72 each year). Correct me if I'm wrong.
n: 3
i/y: 2
pv: -3,200
fv: 0
P/Y: 1
Calculate PMT= 1,087.86
Multiply the annual payment by three years, and you get a total P&I of 3,263.57, which means positive net interest of 63.57.
63.57 of interest is 2% of the original loan, but that is a 0.66% annual rate of return. That's why i/y has to be 6% to get an annualized ~2% return.
When i/y is 6%, you get annual payments at 1,129.39, or $3,388.16 of total P&I. Positive net interest of 188.16 which is right around 2% when annualized ($62.72 each year). Correct me if I'm wrong.
This post was edited on 8/4/15 at 3:43 pm
1
Posted on 8/4/15 at 4:29 pm to Cmlsu5618
~62/3 = 21
3200/3 = 1066
21/1066 = ~2%
3200/3 = 1066
21/1066 = ~2%
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