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HP 12c Calculator - Annual Percentage Rate with Fees and a Balloon

Description
This procedure calculates the APR of a loan when fees are charged (either as a percentage of the loan amount or a flat rate) and a balloon payment is due at some time during the term of the loan. Remember to use the cash flow sign convention (money received is positive, money paid out is negative).
  1. Set End mode (press g, then END) and clear the financial registers (press f, then FIN).
  2. Calculate the periodic payment amount of the loan.
    1. Key in the total number of payment periods and press n.
    2. Key in the periodic interest rate and press i.
    3. Key in the mortgage amount and press PV.
    4. Press PMT to calculate the periodic payment amount.
  3. Calculate the amount of the balloon payment.
    1. Key in the number of the payment period where the balloon payment occurs and press n.
    2. Press FV to calculate the balloon payment amount.
  4. Calculate the actual net amount disbursed.
    1. If the fees are stated as a percentage of the mortgage amount (points), recall the mortgage amount (press RCL, then PV); key in the fee percentage rate; press the percent key %, the minus key [-], then PV.
    2. If the fees are stated as a flat charge, recall the mortgage amount (press RCL, then PV); key in the fee amount (flat charge); press the minus key [-], then PV
    3. If the fees are stated as a percentage of the mortgage amount plus a flat charge, recall the mortgage amount (press RCL, then PV); key in the fee percentage rate; press the percent key %, then press the minus [-]; key in the fee amount (flat charge); press the minus key [-], then PV
  5. Press i to calculate the percentage rate per compounding period.
  6. To calculate the annual nominal percentage rate, key in the number of periods per year and press x
Example of calculating the APR for an amortized loan with a balloon payment
A $50,000.00 loan has monthly payments calculated on a 30-year amortization but requires a balloon payment at the end of seven years to fully pay off the loan. The stated rate on the loan is 15 percent. The loan is made carrying two points plus a $150.00 fee. What is the APR?
Keys (RPN mode)
Display
Description
Press g, then END
Sets END mode
Press f, FIN, then CLX
0.00
Clears the finance and x registers
Press 30, g, then 12x
360.00
Stores the term
Press 15, g, then 12÷
1.25
Stores the monthly interest rate
Press 50000, then PV
50,000.00
Stores the loan amount
Press PMT
-632.22
Calculates monthly payment amount
Press 7, g, then 12x
84.00
Stores the number of payments until the balloon
Press FV
-48,937.43
Calculates balloon payment
Press RCL, PV, 2, %, then [-]
49,000.00
Subtracts points from loan amount
Press 150, [-], then PV
48,850.00
Subtracts flat fee and restores adjusted amount
Press i
1.30
Calculates periodic interest rate
Press 12, then x
15.54
Calculates APR

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