You want to buy a car and a local bank will lend you 20000 T

You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 5 years (60 months), and the nominal interest rate would be 12% with interest paid monthly. What is the monthly loan payment? What is the loan’s EFF%? I need to know how to input this in HP 10bII+ calculator please.

Solution

First to find monthly payment , assign following values in calculator

Press -20000 then press PV

Press 60 the press N

Press 1 then press I/Y (monthly rate is 12/12 = 1%)

Press 0 the press FV

CPT PMT, you will get monthly payment of 444.889

Now to find EFF

Press 444.889*60 = 26693.3372 as FV

-20000 as PV

PMT as 0

I/Y as 0

5 as N

CPT I/Y = 5.94 %

Put this monthly