In this video, we’ll demonstrate how to calculate fully amortized loan payments using the ba2 Plus calculator. For instance, let’s say you receive a five-year loan of \(100,000 at a 6% interest rate with annual payments. To determine the payment amount, we'll enter the number of payments (5), interest rate (6%), present value of the loan (\)100,000), and a future value of zero (as we’re paying down the loan). Upon calculating, we’ll find the payment to be $23,739.64.
Alternatively, for monthly payments, we need to adjust the number of payments and interest rate. For instance, in a 30-year mortgage with monthly payments, we’ll enter 30 multiplied by 12 for the number of payments, 6 divided by 12 for the interest rate, \(100,000 for the present value, and zero for the future value. The calculated payment will be \)599.55, represented as a negative value by convention.
Similarly, for an auto loan, we’ll enter the number of payments (5 multiplied by 12), the adjusted interest rate (6 divided by 12), the present value of the loan (\(10,000), and a future value of zero. Calculating the payment gives us \)193.33 as a negative value due to calculator convention.