student loan payment calculator

- welcome to a lesson on using the ti84 graphing calculator to determine a loan payment. the goal of the video is to determine the loan payment for a fixed installment loan on the ti84. installment buying is when you purchase something today with a loan that you pay back with equal payments over a regular period of time, usually monthly over a period of years.

the two most common examples would be a car loan and a home mortgage loan. in the previous video we used this loan payment formula with fixed payments to determine in most cases the monthly payment. in this video we'll use the finance menu of the graphing calculator to answer the same questions much quicker using the graphing calculator.

and it's really a nice feature of the graphing calculator to play around with before considering taking out a loan. so let's go and take a look at our first example. here we're going to determine the monthly payment for a 30 year mortgage loan of $150,000 with a 5% fixed interest compounded monthly. and then we'll determine the total amount of interest paid over the 30 years. so we're going to press the apps key,

and then press enter to access the finance menu. and then we're going to press enter again to access the pmv solver. capital "n" represents the total number of payments that will be made. we're making monthly payments over 30 years, so n would be 12 x 30 or 360. "i" represents the interest rate which is 5%. pv represents the present value of the loan that's $150,000.

we'll come back to the payment amount. the future value when the loan is paid off should be $0.00. and p/y represents the number of payments per year. we're paying monthly so it's going to be 12. and then c/y means compounds per year. it's compounded monthly so this is also 12. and now all we have to do is go back up to the payment cell. we're going to clear this amount and then press alpha, enter, and it will tell us the required monthly payment.

and notice that it's negative because we'll be paying that amount. so the payment would be $805.23 per month. â  now let's answer the second question that asked us how much interest will be paid over the 30 years. so we'll go to the home screen by pressing second mode for second quit. so our loan amount of $805.23 will be paid

a total of 360 times or 12 times a year for 30 years. so this represents the total amount paid over the 30 years. and if we subtract out the loan amount that'll leave us with the amount of interest paid. so - $150,000 leaves us with $139,882.80 worth of interest paid. so we'd be paying almost as much interest as the loan amount over the 30 year period. now for our second example

we're going to look at the same situation, but instead of using a 30 year mortgage we'll take a look at the difference if we use a 15 year mortgage. so we're going to press the apps key again, enter at the finance menu, enter for pmv solver. now all this information is going to be the same, but now n, the total number of payments, is going to be 12 x 15 instead of 12 x 30

because it's a 15 year mortgage. and, again, everything else is going to stay the same so we'll go down to the payment cell, clear this amount, and then just press alpha, enter to determine the new monthly payment. and now the payment would be $1,186.19. so to determine the total interest paid over 15 years we'll take the monthly payment, multiply it by 12 for the number of payments per year.

then multiply it by 15 for 15 years. so this is the amount of money paid over the 15 years, minus the loan amount will leave us with the total interest paid. and so now the amount of interest paid is $63,514.20. so obviously for the 15 year mortgage the monthly payment went up considerably, but the amount of interest paid also went down considerably. so if you can afford the 15 year mortgage you save yourself from paying a lot of extra interest.

let's go and take a look at one more example with a car loan. let's determine the monthly payment for a five year car loan of $20,000 with a 5.5% interest compounded monthly. and then we'll also determine the total interest paid over the five years. and, again, it's very quick and easy to do on the graphing calculator. we'll press the apps key, and then enter for finance,

and enter for pmv solver. our capital "n" here is going to be 12 monthly payments for 5 years or 12 x 5, which is 60. interest rate is 5.5%, the present value of the loan is $20,000. we'll come back to this row in just a minute. future value is going to be zero. payments per year is 12, compounds per year is also 12.

so we'll go back up to the payment cell, clear this value, and press alpha, enter. so our monthly car payment would be $382.02. and then, again, to determine the total amount of interest paid we'd multiply our monthly payment x 12 x 5 or just 382.02 x 60. this is the total amount paid, and then we'll subtract out the loan amount of $20,000.

so over the five year period we would pay $2,921.20 of total interest. and that's going to do it for this video. i hope you can take advantage of this tool on the graphing calculator to gather all the information you need before taking out a loan. thank you for watching.