Solution 11235: Computing Interest Rate Using the BA II PLUS™ Family Financial Calculator.
How do I compute for the interest rate using a BA II PLUS family calculator?
To compute the interest rate of a loan using a BA II
PLUS family calculator (includes the BA II PLUS AND BA II PLUS
PROFESSIONAL), use the Time Value of Money feature and follow the
example below:
For example:
What is the interest rate on a mortgage for $75,000 with payments of $576.69 each month for 360 months?
N = 360
I/Y = ?
PV = $75,000
PMT = -$576.69
FV = 0
1) Press the [2nd] key and the [I/Y] key. (This enters the P/Y worksheet.)
2)
Set P/Y to 12 for monthly payments by entering 12 and pressing the
[ENTER] key. This also sets the C/Y (compounding periods) to monthly.
3) Press the [2nd] key and the [CPT] key. (This exits the P/Y worksheet.)
4) Press the [2nd] key and the [FV] key. (This clears the TVM worksheet.)
5) Input 75000 and press the [PV] key. (This stores 75000 to the Present Value register.)
6) Input 576.69, press the [+/-] key, and press the [PMT] key. (This stores -576.69 to the Payment register.)
7) Input 360 and press the [N] key. (This stores 360 to the N register.)
8) Press the [CPT] key and the [I/Y] key.
The interest rate is 8.50%.