# NeoCal for Palm OS User Guide

### Amortization

This application uses the , and registers to calculate the amount of interest and principal for a range of payments. The remaining balance is also calculated.

- Pressing
*while entering a number* will amortize for the range of payments starting with *y* and ending with *x* (inclusive). - Pressing by itself will calculate the interest, principal, and balance for the range of payments currently entered (which defaults to the first payment, or range 1-1).
- Pressing will amortize the next range of payments. For instance, if the current range of payments is 1-12 (the first year), then the next range is 13-24 (the second year).
- Pressing will amortize the previous range of payments and is (currently only) available in the Amortization dialog.
- Pressing after pressing or will display the principal. Pressing a second time will display the balance. As a convenience, pressing a third time will calculate the amortization for the next range of payments.
- In RPN mode, press or to display the principal. Pressing a second time will display the balance. Press to calculate the amortization for the next range of payments.
- Pressing will store
*y* and *x* as the starting and ending payments. (Pressing a second time will perform the calculation.) - Pressing recalls the starting and ending payments into the
*y* and *x* registers, respectively. - switches between
*begin* and *end* modes and is used to specify whether compounding occurs at the beginning or the end of the period. When *begin* mode is selected, the *BEGIN* indicator is displayed, otherwise *end* mode is in effect.

The amortization calculation is sensitive to rounding errors and may not match your financial institution's calculations exactly (different institutions use different rounding rules). NeoCal will round the intermediate results based on the display setting for the number of digits to the right of the decimal place, therefore, this setting affects the results.

The Amortization dialog provides a convenient way of viewing all the registers used in the amortization calculation along with the calculated interest, principal, and balance. Use the Preferences dialog to assign a section of the display for quicker access to this dialog.

Let's look at a mortgage example, $200,000 for 30 years at an annual nominal rate of 7 percent with payments and compounding occurring monthly.

- Set the display to show two decimal places in the Preferences dialog.
- If the calculator is in
*begin* mode, press to set *end* mode. - Press to clear the financial registers.
- Press for monthly payments.
- Press to store the loan duration in the register.
- Press to store the interest rate.
- Press to store the loan amount in the present value register.
- Press to calculate the monthly payment amount (-1330.60).
- Press to amortize the first payment and display the interest amount (-1,166.67).
- Press (in RPN mode, press ) to display the principal for the first payment (-163.93).
- Press (in RPN mode, press ) to display the balance after the first payment (199,836.07).
- Press (in RPN mode, press ) to amortize the second payment and display the interest amount (-1,165.71). This process can be repeated through the term of the loan.

To calculate the amount of interest paid during the first year of the loan,

- Press (in RPN mode, use ) to amortize the first twelve payments and display the interest amount (-13,935.65).
- Press to amortize the second year's payments and display the interest amount (-13,788.78).

At any time, you can press to recall the starting and ending payments for the range being amortized. (Use the button to display the starting payment.)