How Do You Calculate Amortized Loans With A Financial Calculator?
A financial calculator includes the key labels PV, FV, i, N and PMT. “PV” refers to the loan’s present value or outstanding balance, “FV” indicates the future value or outstanding balance, “i” represents the interest rate per payment period, “N” denotes the number of payments and “PMT” represents the payment amount per payment period. If you know one of the first two variables and two of the last three, then your calculator can solve for the rest. Determine the number of remaining equal monthly payments on a loan with a nominal rate (as opposed to an effective rate). As an example, for a rate of 7 percent, divide 0.07 by 12 since the nominal rate is the number of compounding periods times the interest per compounding period. Press the equals (=) sign to get the result of the division from Step 1. Then press the “i” sign to enter that result into the calculator’s registry, or memory. Enter the current balance, for example, 300000. Then press “PV” to enter it into the registry. Enter the
