Solution 11232: Computing Effective APR with Points and Fees on the BA II PLUS™ and the BA II PLUS™ PROFESSIONAL.
How do I compute an effective APR with points and fees on the BA II PLUS or the BA II PLUS PROFESSIONAL?
The example below will demonstrate how to calculate an effective APR with points and fees on the BA II PLUS or the BA II PLUS PROFESSIONAL.
Example: Assume there is a $100,000 mortgage with 2 points and $5,000 in fees. With an 8% interest rate for 360 months, what is the effective APR after points and fees?
• Press the [2ND] [P/Y].
• Press [1] [2] [ENTER]. This also sets the C/Y (compounding periods) to monthly.
• Press [2ND] [QUIT].
• Press [2ND] [CLR TVM].
• Press [3] [6] [0] [N].
• Press [8] [I/Y].
• Press [1] [0] [0] [0] [0] [0] [PV].
• Press [CPT] [PMT].
The total monthly payment after points and fees is $733.76.
Compute the actual loan amount by subtracting points and fees:
• Press [1] [0] [0] [0] [0] [0].
• Press [-] [2] [%] [-].
• Press [5] [0] [0] [0] [=].
• Press [PV] [CPT] [I/Y].
The computed effective APR is 8.78%.
Please see the BAII PLUS family guidebooks for additional information.