36 — MORTGAGE QUALIFIER PLUS ®P X2APR and Total Finance ChargesCalculating the Annual Percentage Rate (APR) and Total FinanceCharges (TFC) is performed in two steps: (1) you set up the loanjust like any other problem (that is, enter three known variables andsolve for the fourth) and (2) combine points and fees and press sˆ (APR) to solve APR. If you continue to press ˆ a second time(in succession), the calculator will also display the total financecharges, a third press will display the amount financed, and a fourthpress will display total finance charges plus principal.If mortgage insurance is entered, as seen in the following (second)example, your calculator will include that expense into APR and totalfinance charges, as well as calculate the periodic mortgage insur-ance dollar amount and PIMI (principal, interest, mtg. ins.) payment.Note: APR for non-real estate loans (such as for autos and boats) that compoundinterest based upon 365 days per year cannot be solved using this function, as calcu-lations are based on 360 days per year.Finding APR, Total Finance Charges(Excluding Mortgage Insurance)You are financing a mortgage of $250,000 for 30 years at a nominal,or quoted, rate of 8% interest. The cost of getting the loan is quotedas 1.5 points and $550 in fees. Mortgage insurance is not required.What is the APR and total finance charges when these costs areincluded?STEPS KEYSTROKES DISPLAYClear calculator o o 0.00Enter loan amount 2 5 0 ) l 250,000.00Enter interest 8 ˆ 8.00Enter term 3 0 T 30.00Find monthly P&I payment p “run” 1,834.41Find Loan Costs:Recall loan amount ® l 250,000.00Find point cost x 1 • 5 % = 3,750.00Add fees and find total + 5 5 0 = 4,300.00Find APR* s ˆ “run” 8.18Find total finance charges ˆ 414,688.12Find amount financed ˆ 245,700.00Find total finance chargesplus principal ˆ 660,388.12*Because APR is an interest calculation, it may take several seconds to calculate.
