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## HP 17Bii, 17Bii+, and 19Bii Calculators - Calculating Skipped Payments with a Balloon

Description
Sometimes a loan (or lease) can be negotiated in which a specific number of monthly payments are going to be skipped each year. Seasonality is usually the reason for such an agreement. For example, because of heavy rainfall, a bulldozer cannot be operated in Oregon during December, January, and February. Lessees who wish to make payments only when their machinery is being used will make nine payments per year, but the interest will continue to compound during the months in which payments are not being made. The following equation calculates the monthly payment amount necessary to amortize the loan in the specified amount of time. The payment occurs at the end of the month, and the term of the loan must be an integral number of years.
Calculating skipped payments with a balloon
To calculated skipped payments with a balloon, do the following:
1. Enter the SKIPPED equation into the Solver as follows:
SKIP.BAL:(LOAN-BALxSPP
V(I%÷P/YR:P/YRx#YRS))÷(
1-L(V:1+I%÷P/YR÷100)^(-
P/YRx#YRS))x(G(V)^P/YR-
1)x(G(V)-1)÷(G(V)^P/YR-
G(V)^(P/YR-LPMT)+G(V)^(
P/YR-#SKP-LPMT)-1)=PMT
2. Verify the equation:
• For the HP 17bii and 17bii+, press EXIT, EXIT, YES (to save), then CALC
• For the HP 19bii, press CALC
3. Store or calculate the following variables:
• Loan amount in LOAN
• Amount of the balloon payment in BAL
• Annual interest rate as a percent in I%
• Number of payments per year in P/YR
• Total number of years in #YRS
• Number of last payment period before payments close the first time in LPMT.
• Number of skipped payments in #SKP
• Monthly payment amount in PMT
Example for calculating a skipped payment with a balloon
A bulldozer worth \$100,000 is purchased in September. The first payment is due in October (1 month later) and payments continue for 5 years. Payments will not be made during January, February, and March (months 4 through 6). If the annual interest rate is 14 percent, what monthly payment is necessary to amortize the loan?
 Keys Display Description Press 100000, then LOAN Loan=100,000.00 Enter loan payment Press 0, then BAL BAL=0.00 Enter balloon Press 14, then I% I%=14.00 Enter APR Press 12, then P/YR P/YR=12.00 Enter payments per year Press 5, then #YRS #YRS=5.00 Enter number of years Press MORE More variables Press 3, then LPMT LPMT=3.00 Last payment before closing Press 3, then #SKP #SKP=3.00 Number of skipped payments Press PMT PMT=3,119.89 Solve payment

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