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Loan Payment Calculator Guide - Financial Calculator Tutorial

Calculate loan payments and schedules

2nd INV HYP COMPUTE ENTER SET BGN RAD
0
QUIT
SET
DEL
INS
 
 
 
 
 
 
xP/Y
P/Y
AMORT
BGN
CLR TVM
K
 
 
 
RAND
HYP
SIN
COS
TAN
x!
ex
DATA
STAT
BOND
nPr
ROUND
DEPR
Δ%
BRKEVN
nCr
 
DATE
ICONV
PROFIT
ANS
CLR WORK
MEM
FORMAT
RESET
 

Calculate loan payments, total interest, and payoff schedules. Comprehensive loan calculator for mortgages, auto loans, and personal loans.

How to Use the Loan Calculator

  1. Press 2ND CLR TVM to clear all values
  2. Set payment frequency with 2ND P/Y (12 for monthly)
  3. Enter loan term (N), interest rate (I/Y), and loan amount (PV)
  4. Set future value to 0 (fully paid loan)
  5. Press CPT PMT to calculate payment amount

Understanding Loan Analysis

Loan calculations use the Time Value of Money (TVM) principles to determine the payment amount needed to fully repay a loan over a specified period. The calculator accounts for compound interest and can handle various payment frequencies.

Key Loan Concepts

  • Principal: The amount borrowed (entered as positive in PV)
  • Interest Rate: Annual percentage rate charged on the loan
  • Term: Length of the loan in years
  • Payment: Regular amount paid (shown as negative)
  • Amortization: The process of paying down the loan over time

Formula & Variables

PMT = PV × [r(1+r)^n] / [(1+r)^n - 1]

Where: r = periodic interest rate, n = total number of payments
TVM Variables for Loans:
  • N: Total number of payments (years × payments per year)
  • I/Y: Annual interest rate (as percentage)
  • PV: Present value (loan amount, positive = received)
  • PMT: Payment amount (negative = paid out)
  • FV: Future value (0 for fully paid loan)
  • P/Y: Payments per year (12 for monthly, 26 for bi-weekly)

Example Calculations

Example: Monthly Mortgage Payment

Scenario: You're buying a $200,000 home with a 30-year mortgage at 6% annual interest. What's your monthly payment?

Step Input Display Description
1 2ND CLR TVM 0.00 Clear previous values
2 2ND P/Y 12 ENTER P/Y= 12.00 Set 12 payments per year (monthly)
3 2ND QUIT 0.00 Return to calculator mode
4 30 2ND xP/Y N N= 360.00 30 years × 12 = 360 payments
5 6 I/Y I/Y= 6.00 6% annual interest rate
6 200000 PV PV= 200,000.00 Loan amount (positive = received)
7 0 FV FV= 0.00 No balloon payment
8 CPT PMT PMT= -1,199.10 Calculate monthly payment
Answer: $1,199.10 per month

The negative sign indicates money paid out. After setting P/Y = 12, the calculator correctly interprets N = 360 as monthly payments. Total paid: $431,676 over 30 years.

Payment Breakdown

  • Monthly Payment: $1,199.10
  • Total of Payments: $431,676 (360 × $1,199.10)
  • Total Interest Paid: $231,676 ($431,676 - $200,000)
  • Interest Percentage: 115.84% of principal

Using the Amortization Worksheet

After calculating the loan payment, you can use the Amortization (AMORT) worksheet to see how much of each payment goes toward principal versus interest:

  • Press 2ND AMORT to access the worksheet
  • Enter payment range (P1 and P2)
  • View BAL (balance), PRN (principal), and INT (interest)
  • For example, payment 1 has about $1,000 interest and $199 principal

Frequently Asked Questions

Make extra principal payments, pay biweekly instead of monthly, or round up payments. Even small extra amounts significantly reduce interest and time.

The interest rate is the cost of borrowing the principal. APR includes the interest rate plus other costs like origination fees, expressed as a yearly rate.

A 15-year mortgage has higher monthly payments but saves significant interest. A 30-year provides lower payments and more flexibility. Compare total interest costs.

Extra payments go directly to principal, reducing the balance on which interest is calculated. This can save thousands in interest and years off your loan.

Amortization is the process of paying off debt over time through regular payments. Early payments are mostly interest; later payments are mostly principal.

Related Calculators

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Amortization Calculator

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TVM Calculator

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🔄

Interest Rate Converter

Convert between different interest rate types
📊

NPV Calculator

Evaluate investment profitability with NPV analysis

Disclaimer

This Financial Calculator is an independent, third-party tool provided by ryanoconnellfinance.com. It is not affiliated with, endorsed by, or connected in any way to Texas Instruments Incorporated or any of its products. All trademarks, including "BA II Plus," are the property of their respective owners. This tool is provided for educational and informational purposes only and should not be used for official examinations where specific hardware calculators are required. The accuracy of calculations is not guaranteed; verify all results.

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