Getting Started: Financing a Car

Getting Started is a fast-paced introduction. Read the chapter for details.

You have found a car you would like to buy. You can afford payments of 250 per month for four years. The car costs 9,000. Your bank offers an interest rate of 5%. What will your payments be? Can you afford it?

1. Press z † ~ ~ ~ [enter] to set the fixed-decimal mode setting to 2.
2. Press Π[enter] to select 1:Finance from the APPLICATIONS menu.
3. Press [enter] to select 1:TVM Solver from the CALC VARS menu. The TVM Solver is displayed.
4. Enter the data: N (number of payments)= 48 I% (interest rate)=5 PV (present value)=9000 PMT (amount of each payment)=0 FV (future value)=0 P/Y (payments per year)=12 C/Y (compounding periods per year)=12 5. Select PMT:END, which indicates that payments are due at the end of each period. 6. Move the cursor to PMT and press ƒ \. Can you afford the payment?