Solution 18169: Finding the New Monthly Payment and APR of a Re-financed Loan Using the BA Real Estate™.
How can I find the new monthly payment and APR of a re-financed loan using the BA Real Estate?
Please see the instructions below on finding the APR of a refinanced loan using the BA Real Estate.
Example:
Five years ago, a couple purchases a home with a 30 year, 200,000 mortgage loan at 12% annual interest. The couple can now re-finance the loan balance at 8.5% annual interest, provided they pay 2 points plus a $1,000 fee. What is the new monthly payment and the APR of the new loan?
• Press [2nd] [BGN/END] until the BGN indicator disappears.
• Press [2nd] [CLR TVM] to clear the TVM values.
• Press [2nd] [P/Y] and enter 12, then press [=] [=].
• Enter 30 and press [TERM].
• Enter 12 and press [I%].
• Enter 200 and press [000] [LOAN].
• Press [CPT] [PMT] to compute the monthly payment. The calculator yields -2,057.23. The payment is $2,057.23.
• Enter 5 and press [TERM] [CPT] [FV] to find the loan balance. The calculator yields -195,326.44. The balance is $195,326.44.
• Press [+/-] [LOAN] [0] [FV] to replace the original loan amount and to clear FV.
• Enter 30 and press [TERM].
• Enter 8.5 and press [I%].
• Press [CPT] [PMT] to compute the new monthly payment. The calculator yields -1,501.89. The new payment is $1,501.89.
• Press [APR] [=] to start the APR register.
• Enter 2 and press [=].
• Enter 1000 and press [=].
The APR is 8.78.
Please see the BA Real Estate guidebook for additional information.