Calculating an Amortization Schedule

Note: You must enter values for I%, PV, and PMT before computing Bal

You want to buy a home with a 30-year mortgage at 8 percent APR. Monthly payments are 800. Calculate the outstanding loan balance after each payment and display the results in a graph and in the table.

1. Press j.

2. Set the fixed-decimal mode setting to 2.

3. Select Par graphing mode.

4. Press the home key * and select the Finance icon .

5. Select option 1: TVM solver_.

6. Press 360 to enter number of payments. Press ≥ 8 to enter the interest rate. Press ≥ ≥ | 800 to enter the payment amount. Press ≥ 0 to enter the future value of the mortgage. Press ≥ 12 to enter the payments per year, which also sets the compounding periods per year to 12. Leave PMT set to End PMT:END.

7. Move the cursor to the PV prompt and select SOLVE by pressing h to solve for the present value.

8. Press c to display the parametric Y= editor. Turn off all stat plots. Press l to define X1T as T.

9. Press the down arrow key ≥ and then press the home key * and select the Finance icon  and select option 9: bal( to insert the balance function into Y1T. Then press l ) to define Y1T as bal(t.

10. Press d to display the window variables. Enter the values below.

Note: This only traces the value by year, however the steps below will show monthly balance.

11. Press g to draw the graph and activate the trace cursor. Press the right arrow key › and press the left arrow key ‹ to explore the graph of the outstanding balance over time. Press a number and then press = to view the balance at a specific time T.

12. Press a Á and enter the values below.
TblStart=0@Tbl=1

13. Press a Ä to display the table of outstanding balances (Y1T).

14. Press j and select Graph-Table split-screen mode, so that the graph and table are displayed simultaneously.

15. Press g to display X1T (time) and Y1T (balance) in the table.