Education Technology

# Knowledge Base

## Solution 24491: Computing Effective Annual Percentage Rate (APR) with Points and Fees on the TI-83 Plus and TI-84 Plus Family Calculators.

### How do I compute an effective APR with points and fees on theTI-83 Plus and TI-84 Plus family calculators?

The example below demonstrates how to calculate an effective APR with points and fees on the TI-83 Plus or TI-84 Plus Family calculators.

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 [APPS] and select [1:Finance] •  Choose [1: TVM Solver].
• Input 360 and press the [down arrow] key
• Input 8 and press the [down arrow] key.
• Input 100,000 and press the [down arrow] key.
• Press [ALPHA] followed by[ENTER] to compute the monthly payment.

The total monthly payment is \$733.76(rounded off to hundredths).

Compute the actual loan amount by subtracting points and fees on the PV= line:

• 100000 [X] .98 [-] 5000. This should store 93000 on PV
• To compute the interest rate, or the effective APR scroll up I% and press [Alpha] followed by [ENTER].
The computed effective APR is 8.78%.

Please see the guidebook for additional information on using the TI-83 Plus and TI-84 Plus family calculators.