Rate of return with balloon payment
This will calculate: if you loan money and receive equal periodic payments plus a lump sum balloon, this will calculate your rate of return.
Example: you loan me $35,000. I pay you $600 per month for 5 years and also $10,000 at the end of the 5th year. What is your rate of return?
Please note: pressing i gives the monthly return of 0.77. Multiply by 12 for the annual return of 9.29.
Prefer to let the site do the arithmetic? Use the rate of return with balloon form.
- HP-12C keystrokes
- 1 5 g n
- 2 35000 CHS PV
- 3 600 PMT
- 4 10000 FV
- 5 i = .77
- Then annualise the monthly rate
- 6 12 × = 9.29
CHS changes the number to a negative. On the HP-12C every cash outlay is entered as a negative, which is why the answer comes back positive — it is money you receive. g is the blue shift key — press it immediately before n or i to enter the term in months rather than years.