Annuity problem using Ba2 plus multiple, calculator, problem, 120, house

atate2007

I tried to solve example 20 on page 286 (Volume I) using BA II plus calculator but i never got the correct answer using multiple approaches...
If anyone was kind enough to tell me the key strokes to solve it I would grealty appreciate the answer, as its one of the few poblems in the Quant. that i was unable to solve using the calculator.

Edit: I'll post a abridged/paraphrased version of the example here to ease the process.
You want to buy a 120,000 $ house
You made a down payment of 20,000 $ and borrowing the remainder with 30 year fixed rate mortgage with monthly payments.
1st payment is @ T=1, interest rate =8% with monthly comp.
What will the monthly mortgage payment be ?



Edited 1 time(s). Last edit at Wednesday, February 9, 2011 at 02:20AM by Benjie.

kamara5

From information provided above:

I/Y: 8/12
PV: $100,000
N: 30*12

--> PMT = $733.78

make sure that:
* calculator is at "end"
* I/Y is entered as 8/12 and not 0.08/12

hariRaj

Thanks for answering, I was wondering if it was possible to use P/Y and C/Y to solve it ??

JPSem

it is possible - but recommendation is not to use those P/Y and C/Y - since you could forget to undo them and mess up future TVM problems. Use I/Y = Annual Rate / # of Periods and N= # of years * # of Periods

consistently and you will not face issues.

CP

ramzes

Probably goes without saying, but get in the habit of clearing the TVM keys before doing problems...in a case like this if you had a FV leftover from the last problem it'd throw you off.