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1 - FEATURES The Antelope Systems Loan Amortization Package was designed to make quick and accurate Loan Calculations and Amortization Schedules available to the individual and professional user at a reasonable price. Yet this package provides many of the same features and capabilities available in the more expensive packages, while also handling larger numbers and running faster than many of them. Following is a list of some of the major features of the Antelope Amortization Package: * Handles Principal and Payment Amounts of up to 13 digits (11 to the left and 2 to the right of the decimal point) * Provides Interest Rate accuracy up to 8 digits (3 to the left and 5 to the right of the decimal point) * Allows for Fiscal Year End Totals * Calculates the unknown variable from among the following when the other three values are known: - Original Principal - Payment Amount - Interest Rate - Number of Payments * Handles various payment intervals - Monthly - Quarterly - Semiannual - Annual * Outputs Amortization Schedules to any of the following: - Screen - Printer - ASCII file on floppy or hard disk * Accommodates the following: - Balloon Payments - Interest Only loans - Interest Free loans - Fixed Principal Payment - Adjustable Rate Mortgages - Additional Payments - Negatively Amortizing loans 1 2 - INSTALLATION The Antelope Amortization package can be installed to run from either a floppy diskette or a hard disk drive. Just follow the steps for the procedure that applies to your system. FLOPPY DISKETTE INSTALLATION WITH ONE DRIVE STEP 1: Insert your DOS diskette into the diskette drive. At the A> prompt, type: format b: When the message "Insert new diskette for drive B:" appears, remove the DOS diskette and place a blank diskette in the drive. Press the ENTER key. When the message "Format another (Y/N)?" appears, enter "N". Remove the diskette from the drive and label it "AMORTIZATION". STEP 2: Insert the master Antelope Amortization diskette into the drive. At the A> prompt, type: copy a:*.* b: When the message "Insert diskette for drive A:" appears, press the ENTER key. When the message "Insert diskette for drive B:" appears, remove the master Antelope Amortization diskette from the drive and insert new "AMORTIZATION" diskette and press the ENTER key. When the message "Insert diskette for drive A:" appears again, remove the "AMORTIZATION" diskette and insert the master Antelope Amortization diskette again. Keep exchanging diskettes as prompted until the message "n files copied" appears and the A> prompt returns. The diskette labeled "AMORTIZATION" is now the one you should use for running the amortization program. The master Antelope Amortization diskette is your backup copy. FLOPPY DISKETTE INSTALLATION WITH TWO DRIVES STEP 1: Insert your DOS diskette into the diskette drive A. Insert a blank diskette into drive B. At the A> prompt type: format b: When the message "Format another (Y/N)?" appears, enter "N". 2 STEP 2: Remove your DOS diskette and insert the master Antelope Amortization diskette into drive A. At the A> prompt type: copy a:*.* b: When the message "n files copied" appears and the A> prompt returns, remove the diskettes. The diskette labeled "AMORTIZATION" is now the one you should use for running the amortization program. The master Antelope Amortization diskette is your backup copy. HARD DISK INSTALLATION STEP 1: Create a subdirectory for the Antelope Amortization package on your hard disk by typing the following command at the C> prompt: md \amort STEP 2: Change to the new directory by typing the following command at the C> prompt: cd \amort STEP 3: Insert the master Antelope Amortization diskette into drive A. At the C> prompt type: copy a:*.* When the message "n files copied" appears and the C> prompt returns, remove the diskettes. You can now run the Antelope Amortization program from your hard disk subdirectory \AMORT. The master Antelope Amortization diskette is your backup copy. 3 3 - SCREEN AND KEY USAGE STARTING FROM A FLOPPY DISKETTE To start the Antelope Amortization program from a floppy diskette, place your AMORTIZATION diskette, created during the installation steps, into drive A. At the A> prompt type: amort Then press the ENTER key. STARTING FROM A HARD DISK To start the Antelope Amortization program from your hard disk, first change to the /AMORT subdirectory by typing the following command at the C> prompt: cd \amort Press the ENTER key and then at the prompt type: amort Then press the ENTER key. LOAN INPUT SCREEN When you start up the Antelope Amortization program, the first thing you will see is the Copyright Notice Screen. After about one second, the Loan Input Screen will appear. You enter the information for loan you wish to calculate by filling in the fields on the Loan Input Screen. MONOCHROME MODE If you are using a Monochrome Monitor, press Function Key F5 while the first field on the screen, the Loan Title Field, is being highlighted. This will put the display into Monochrome Mode for proper display on a Monochrome Screen. You may also use this option with a Color Monitor to produce a Black and White display. Pressing F5 a second time will return the display to Color Mode. The mode may only be changed while the Loan Title Field is being highlighted. Changing the mode will clear all fields. LOAN TITLE FIELD The Loan Title Field can be used to enter a Description for the loan that will appear in the heading of the Amortization Schedule. The Description can be up to 45 characters in length. It will be centered in the heading. All Alphabetic, Numeric, and Special Characters may be used. An example might be: "Home Mortgage Loan for John Jones". 4 DATE OF LOAN FIELD The Date of Loan Field initially contains the Current Date as obtained from your computer. This date will be printed in the Heading of the Amortization Schedule as the date the loan was made. It is also used to calculate the payment due dates on the schedule. If the loan was made on other than the current date, you may change the date to be the Actual Loan Date. The format of this field must be of the form "11/21/1990". Only Numeric Characters and Slashes are allowed. Invalid dates such as "02/30/1991" will not be allowed. However, dates entered in several other formats such as "05-06-1992", "05 06 1992", "5/6/1992", or "05/06/92" will be recognized and accepted and then redisplayed in standard format. If the format is not recognized, the editor will "BEEP" you, and you must rekey. SUBTOTAL MONTH FIELD The Subtotal Month (SUBT MO) indicates the month after which Annual Subtotals will be printed. It is initially set to "12" so that subtotals will appear at the end of each Calendar Year. If you wish Annual Subtotals to be taken after a different month, you may change this field to any month from "01" to "12". For example, if you need the subtotals at the end of your Fiscal Year which ends on June 30th, then enter "06". PRINCIPAL AMOUNT FIELD The Principal Amount Field is where you will enter the Total Amount of the Loan. This will be the Original Balance before the first payment is made. The field must be numeric. Commas are optional. A decimal point may be used. After the program edits your entry, it will be redisplayed in a standard format. Up to 13 numeric digits (including both dollars and cents) may be entered. INTEREST RATE FIELD The Interest Rate Field is used to enter the Annual Interest Rate to be paid by the borrower to the lender for use of the money. The program will use this annual rate to compute the actual rate to be applied to each payment period. The field must be numeric with a decimal point allowed. Up to 8 numeric digits may be entered (including 3 digits to the left and 5 to the right of the decimal point). FREQUENCY OF PAYMENTS FIELD The Frequency of Payments Field allows you to enter the Payment Schedule Option, that is whether the payments will be made Monthly, Quarterly, Semiannually, or Annually. Enter "M" for Monthly, "Q" for Quarterly, "S" for Semiannual, or "A" for Annual Payments. NUMBER OF PAYMENTS FIELD The Number of Payments Field is where you enter the Total Number of Payments to be made over the life of the loan. For example, if payments are to be made monthly for 10 years, then enter 120 in this field (10 years times 12 months per year). The field must be numeric, and may contain up to 4 digits. 5 PAYMENT AMOUNT FIELD The Payment Amount Field is used to enter the Exact Amount of the Periodic Payment. The field must be numeric with a decimal point allowed. This field will commonly be left blank to allow the program to calculate the Exact Payment Amount (see "Solving for Payment Amount" in chapter 4). OUTPUT OPTION FIELD The Output Option Field is used to indicate whether the Amortization Schedule is to be displayed on the Screen, printed on your Printer, or output to an ASCII File on your Hard Disk or a Floppy Diskette. Enter "S" for Screen Display, "P" for Printer, or "D" for Disk ASCII File output. DISK FILE NAME FIELD This message appears when the "D" option is selection to the Output Option Field. A default File Name is displayed in the reply field. You may either select the default by pressing ENTER, or overtype a new name into the field. Disk and Directory names may be used, for example, "C:\AMORT\JONES.LN1". The Amortization Schedule will be output to the file indicated. The DOS rules for File Names must be followed. SCREEN VERIFICATION FIELD After the Output Option Field has been entered, the message "ARE ALL ENTRIES CORRECT? (Y/N)" appears at the bottom of the screen. If you reply "Y", the program assumes all entries are correct and proceeds with outputting the Amortization Schedule. If you reply "N" or just press ENTER, the cursor is returned to the top of the Loan Input Screen to allow corrections. HELP SCREEN The Help Screen provides information on the Individual Fields of the Loan Input Screen as well as information on Key Usage. To obtain information on a particular field, use the Arrows to move the cursor to that field, then press the Function Key F1. The Help Screen will display information on the field selected and also provide a Menu of selections at the bottom of the screen for selecting information on the functions of the available Keys. Pressing F1 again will cause information to be displayed on the Highlighted Field in the Menu. You may use the Enter Key and the Up and Down Arrows to change the selected field. Use the Escape Key to return to the Loan Input Screen. KEY USAGE Any of the Alphabetic Keys (Upper and Lower Case), Numeric Keys, and Special Character Keys may be used when entering data into an Alphanumeric field (Loan Title). For the Numeric fields (Principal Amount, Interest Rate, Payment Amount, and Number of Payments), only the Numeric Keys (0123456789) and a few Special Character Keys ($%+,-.) will be allowed. If any other key is struck, the editor will "BEEP" you, and you must rekey. For the Date Field, you may enter only the numeric characters and the special characters "/" and "-". For the fields which request you to select a Single Character Definite Response to a multiple choice selection (Frequency of Payments, Output Option, Screen 6 Verification), only those characters in the selection may be entered. However, either Upper or Lower Case may be used. For the Subtotal Month Field, only numeric keystrokes will be accepted. The Disk File Name Field will accept all characters, but the DOS rules for File Names must be followed. After you have entered a Numeric field, the editor will reformat it into a Standard Numeric Format using commas and a decimal point. Single Character Response Fields will be changed to Upper Case. There are also several Special Keys which you may use to aid you the entering of data. Following is a description of those keys and their special functions. UP ARROW KEY This key will cause the cursor to move to the preceding field on the Loan Input Screen. Normally that will be on the entry line above the current position. Use this to go back and change a field already entered or skipped. In the Help Screen, it will cause the Hightlighting of the preceding Menu Field for selecting further help. DOWN ARROW KEY This key will cause the cursor to move down to the next field on the Loan Input Screen. Normally that will be on the entry line below the current position. Use this to skip a field or to move on to the next field after a field has been entered. In the Help Screen, it will cause the Highlighting of the next Menu Field for selecting further help. HOME KEY The Home Key will position the cursor at the beginning of the current field, not where previously entered data begins, but at the actual beginning of the field. END KEY The End Key will position the cursor at the end of the data in the current field. INSERT KEY Pressing this key will turn on Insert Mode, which allows you to insert characters in the middle of previously entered data. The characters entered will be inserted at the cursor position and existing characters on and to the right of the cursor will be shifted to the right. When Insert Mode is on, the Cursor will be displayed with increased height. Pressing the Insert key a second time turns off Insert Mode. When Insert Mode is off, you are in Overtype Mode. Overtype Mode is automatically on when you first enter a field. Overtype Mode allows you to overwrite previously entered data. DELETE KEY Use this key to delete data one character at a time. Each time the key is pressed, the character at the cursor is deleted all characters to the right of the cursor are shifted to the left. 7 TAB KEY Pressing the Tab key will erase all data in the current field. You may use this key to clear a field before reentering data. F1 KEY Pressing the Function Key F1 will cause help information to be displayed for the field in which the cursor is positioned. If the Help Screen is already being displayed, pressing F1 will cause help information to be displayed for the field that is highlighted at the bottom of the screen. F2 KEY Pressing the Function Key F2 while the cursor is in the Payment Amount Field has the same effect as the Enter Key except that the amount will be interpreted as a Fixed Payment to Principal instead of a Total Payment Amount. Placing the cursor back in the field and pressing F2 a second time will release the option. A "P" displays to the right of the field when the option is in effect. F3 KEY Use the F3 Function Key to copy information from the Previously Entered Loan to the fields of the Current Loan Input Screen. Only the field in which the cursor is positioned will be updated. F4 KEY Use the F4 Function Key to put a Hold on the Zero value in a field so as to prevent the program from calculating a new value for the field. Pressing F4 a second time will release the Hold. An "H" appears to the right of the field when a hold is in effect. ENTER/RETURN KEY Pressing the Enter/Return Key causes the field just entered to be accepted and edited by the program. If no errors are found in the edit, the cursor is moved down to the next field on the Loan Entry Screen. If an edit error is detected, you will hear a BEEP and the cursor will remain in the current field awaiting your correction. In the Help Screen, the Enter Key will cause the Highlighting of the next Menu Field for selection further help. ESCAPE KEY When pressed while in the Help Screen or while an Amortization Schedule is being displayed, the Escape Key will return you to the Loan Input Screen immediately. If pressed while the Loan Input Screen is being displayed, the Escape Key will end the session and return you to DOS. Use this key for normal program termination. 8 4 - COMPUTING LOANS Computing Loans and producing Amortization Schedules with the Antelope Amortization Program is easy and straightforward. The program can find the value of any one of the four Numeric Variables (Initial Principal Amount, Interest Rate, Number of Payments, and Payment Amount) when the other three values are known. The following examples will illustrate this. You might wish to actually input some of these examples into the Antelope Amortization Program in order to familiarize yourself with its use. Start the program by entering "AMORT" (see chapter 3 for details). The Loan Input Screen will then appear. FINDING THE PAYMENT AMOUNT Suppose you have just purchased a home financed with a loan from the bank in the amount of $65,000. The annual interest rate is 11.0% The loan will be paid off over 30 years in monthly installments. How much will each payment be? Enter the information on the Loan Input Screen as follows: LOAN TITLE: Home Mortgage Loan DATE OF LOAN: 10/06/1991 SUBT MO: 12 PRINCIPAL AMOUNT: 65,000.00 INTEREST RATE: 11.0% FREQUENCY OF PAYMENTS (M,Q,S,A): M (for monthly) NUMBER OF PAYMENTS: 360 (for 30 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S (for output to screen) Notice that Payment Amount has been left blank. When you initially pass over this field by pressing Enter or the Down Arrow without having entered data, the program will place "0.00" in the field. After you have entered "S" in the Output Option field and pressed Enter, the program will compute the following: PAYMENT AMOUNT: 619.01 So the amount of the monthly payments has been found. Also the Screen Verification message now appears at the bottom of the screen: ARE ALL ENTRIES CORRECT? (Y/N) To display the Amortization Schedule for this loan, type "Y" and press Enter. 9 Following are the first and last year of the schedule generated: AMORTIZATION SCHEDULE Home Mortgage Loan Page 1 $65,000.00 loan on 10/06/1991 at 11% for 360 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 11/06/91 619.01 595.83 23.18 64,976.82 2 12/06/91 619.01 595.62 23.39 64,953.43 --------------- -------------- --------------- ANNUAL TOTAL 1,238.02 1,191.45 46.57 --------------- -------------- --------------- 3 01/06/92 619.01 595.41 23.60 64,929.83 4 02/06/92 619.01 595.19 23.82 64,906.01 5 03/06/92 619.01 594.97 24.04 64,881.97 6 04/06/92 619.01 594.75 24.26 64,857.71 7 05/06/92 619.01 594.53 24.48 64,833.23 8 06/06/92 619.01 594.30 24.71 64,808.52 9 07/06/92 619.01 594.08 24.93 64,783.59 10 08/06/92 619.01 593.85 25.16 64,758.43 11 09/06/92 619.01 593.62 25.39 64,733.04 12 10/06/92 619.01 593.39 25.62 64,707.42 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 349 11/06/20 619.01 64.21 554.80 6,449.47 350 12/06/20 619.01 59.12 559.89 5,889.58 --------------- -------------- --------------- ANNUAL TOTAL 7,428.12 1,035.15 6,392.97 --------------- -------------- --------------- 351 01/06/21 619.01 53.99 565.02 5,324.56 352 02/06/21 619.01 48.81 570.20 4,754.36 353 03/06/21 619.01 43.58 575.43 4,178.93 354 04/06/21 619.01 38.31 580.70 3,598.23 355 05/06/21 619.01 32.98 586.03 3,012.20 356 06/06/21 619.01 27.61 591.40 2,420.80 357 07/06/21 619.01 22.19 596.82 1,823.98 358 08/06/21 619.01 16.72 602.29 1,221.69 359 09/06/21 619.01 11.20 607.81 613.88 360 10/06/21 619.51 5.63 613.88 0.00 --------------- -------------- --------------- ANNUAL TOTAL 6,190.60 301.02 5,889.58 --------------- -------------- --------------- TOTALS: 222,844.10 157,844.10 65,000.00 10 Consider an automobile loan for $9,500.00 extended on 3/15/92 to be repaid in monthly payments over 5 years at 14% interest. How large will the payments be? Enter the information on the Loan Input Screen as follows: LOAN TITLE: Automobile Loan DATE OF LOAN: 03/15/1992 SUBT MO: 12 PRINCIPAL AMOUNT: 9,500.00 INTEREST RATE: 14% FREQUENCY OF PAYMENTS (M,Q,S,A): M (for monthly) NUMBER OF PAYMENTS: 60 (for 5 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S (for output to screen) The program calculates the Payment Amount as shown below: PAYMENT AMOUNT: 221.05 Reply "Y" to the Screen Verification message at the bottom of the screen to display the Amortization Schedule. Following is the first year of the Amortization Schedule: AMORTIZATION SCHEDULE Automobile Loan Page 1 $9,500.00 loan on 03/15/1992 at 14% for 60 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 04/15/92 221.05 110.83 110.22 9,389.78 2 05/15/92 221.05 109.55 111.50 9,278.28 3 06/15/92 221.05 108.25 112.80 9,165.48 4 07/15/92 221.05 106.93 114.12 9,051.36 5 08/15/92 221.05 105.60 115.45 8,935.91 6 09/15/92 221.05 104.25 116.80 8,819.11 7 10/15/92 221.05 102.89 118.16 8,700.95 8 11/15/92 221.05 101.51 119.54 8,581.41 9 12/15/92 221.05 100.12 120.93 8,460.48 --------------- -------------- --------------- ANNUAL TOTAL 1,989.45 949.93 1,039.52 --------------- -------------- --------------- 10 01/15/93 221.05 98.71 122.34 8,338.14 11 02/15/93 221.05 97.28 123.77 8,214.37 12 03/15/93 221.05 95.83 125.22 8,089.15 11 Suppose that financier Ronald Strump needs an additional 10 million to complete his latest acquisition deal. The money can be borrowed at the current prime rate of 9.135% and paid off over 20 years in monthly installments. The date of the loan will be 5/1/91. Ronald needs to know the amount of each payment and annual totals based on his fiscal year which ends June 30. Enter the information as follows: LOAN TITLE: Acquisition Loan DATE OF LOAN: 05/01/1991 SUBT MO: 06 (for fiscal year totals June 30) PRINCIPAL AMOUNT: 10,000,000.00 INTEREST RATE: 9.135% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 240 (for 20 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S The program calculates the Payment Amount as shown below: PAYMENT AMOUNT: 90,842.66 Reply "Y" to the Screen Verification message at the bottom of the screen to display the Amortization Schedule. Note that the Year End Subtotals are printed after the month of June as a result of entering SUBT MO: 06 in the Loan Input Screen. AMORTIZATION SCHEDULE Acquistiton Loan Page 1 $10,000,000.00 loan on 05/01/1991 at 9.135% for 240 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 06/01/91 90,842.66 76,125.00 14,717.66 9,985,282.34 --------------- -------------- --------------- ANNUAL TOTAL 90,842.66 76,125.00 14,717.66 --------------- -------------- --------------- 2 07/01/91 90,842.66 76,012.96 14,829.70 9,970,452.64 3 08/01/91 90,842.66 75,900.07 14,942.59 9,955,510.05 4 09/01/91 90,842.66 75,786.32 15,056.34 9,940,453.71 5 10/01/91 90,842.66 75,671.70 15,170.96 9,925,282.75 6 11/01/91 90,842.66 75,556.21 15,286.45 9,909,996.30 7 12/01/91 90,842.66 75,439.85 15,402.81 9,894,593.49 8 01/01/92 90,842.66 75,322.59 15,520.07 9,879,073.42 9 02/01/92 90,842.66 75,204.45 15,638.21 9,863,435.21 10 03/01/92 90,842.66 75,085.40 15,757.26 9,847,677.95 11 04/01/92 90,842.66 74,965.45 15,877.21 9,831,800.74 12 05/01/92 90,842.66 74,844.58 15,998.08 9,815,802.66 13 06/01/92 90,842.66 74,722.80 16,119.86 9,799,682.80 --------------- -------------- --------------- ANNUAL TOTAL 1,090,111.92 904,512.38 185,599.54 --------------- -------------- --------------- 14 07/01/92 90,842.66 74,600.09 16,242.57 9,783,440.23 12 FINDING THE NUMBER OF PAYMENTS John has a credit card debt of $8,000.00. The interest charge is 18%. If he pays $250.00 a month, how long will it take him to pay it off? LOAN TITLE: Credit Card Loan DATE OF LOAN: 01/01/1991 SUBT MO: 12 PRINCIPAL AMOUNT: 8,000.00 INTEREST RATE: 18% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: PAYMENT AMOUNT: 250.00 OUTPUT OPTION (S/P/D): S The program calculates the Number of Months needed to pay off the debt: NUMBER OF PAYMENTS: 44 So if John can stick to his planned payment schedule, he can have his card paid off in 3 years and 8 months. Reply "Y" to the Screen Verification message at the bottom of the screen to display the amortization schedule. AMORTIZATION SCHEDULE Credit Card Loan Page 1 $8,000.00 loan on 01/01/1991 at 18% for 44 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 02/01/91 250.00 120.00 130.00 7,870.00 2 03/01/91 250.00 118.05 131.95 7,738.05 3 04/01/91 250.00 116.07 133.93 7,604.12 4 05/01/91 250.00 114.06 135.94 7,468.18 5 06/01/91 250.00 112.02 137.98 7,330.20 6 07/01/91 250.00 109.95 140.05 7,190.15 7 08/01/91 250.00 107.85 142.15 7,048.00 8 09/01/91 250.00 105.72 144.28 6,903.72 9 10/01/91 250.00 103.56 146.44 6,757.28 10 11/01/91 250.00 101.36 148.64 6,608.64 11 12/01/91 250.00 99.13 150.87 6,457.77 --------------- -------------- --------------- ANNUAL TOTAL 2,750.00 1,207.77 1,542.23 --------------- -------------- --------------- 12 01/01/92 250.00 96.87 153.13 6,304.64 13 FINDING THE INITIAL PRINCIPAL AMOUNT Fred is considering buying a business. He can see from the seller's financial statements that he has been making payments of $627.86 a month to pay off a 5 year business loan at 9.35% interest. Fred would like to quickly know what was the Original Amount of that loan. LOAN TITLE: Business Loan DATE OF LOAN: 02/01/1988 SUBT MO: 12 PRINCIPAL AMOUNT: INTEREST RATE: 9.35% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 60 PAYMENT AMOUNT: 627.86 OUTPUT OPTION (S/P/D): S The program calculates Initial Principal Amount of the loan: PRINCIPAL AMOUNT: 30,000.05 This is the exact figure that corresponds to the three given quantities. However, since all payment amounts must be rounded to the nearest cent, the final payment being adjusted to compensate for such rounding, the actual amount of the loan was probably an even $30,000.00. AMORTIZATION SCHEDULE Business Loan Page 1 $30,000.05 loan on 02/01/1988 at 9.35% for 60 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 03/01/88 627.86 233.75 394.11 29,605.94 2 04/01/88 627.86 230.68 397.18 29,208.76 3 05/01/88 627.86 227.58 400.28 28,808.48 4 06/01/88 627.86 224.47 403.39 28,405.09 5 07/01/88 627.86 221.32 406.54 27,998.55 6 08/01/88 627.86 218.16 409.70 27,588.85 7 09/01/88 627.86 214.96 412.90 27,175.95 8 10/01/88 627.86 211.75 416.11 26,759.84 9 11/01/88 627.86 208.50 419.36 26,340.48 10 12/01/88 627.86 205.24 422.62 25,917.86 --------------- -------------- --------------- ANNUAL TOTAL 6,278.60 2,196.41 4,082.19 --------------- -------------- --------------- 11 01/01/89 627.86 201.94 425.92 25,491.94 12 02/01/89 627.86 198.62 429.24 25,062.70 14 FINDING THE INTEREST RATE Mary is considering buying a major appliance. She has been told that her appliance is $749.95. Mary would like to know what Interest Rate she would be payments would be $26.00 a month for 36 months. The total price of the paying. LOAN TITLE: Appliance Loan DATE OF LOAN: 10/01/1991 SUBT MO: 12 PRINCIPAL AMOUNT: 749.95 INTEREST RATE: FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 36 PAYMENT AMOUNT: 26.00 OUTPUT OPTION (S/P/D): S The program calculates the Interest Rate being paid: INTEREST RATE: 15.00745 This is the exact figure up to the maximum digits available corresponding to the three given quantities. Since payment amounts must be rounded to the nearest cent, the final payment being adjusted to compensate for such rounding, the actual Interest Rate is probably an even 15%. AMORTIZATION SCHEDULE Appliancel Loan Page 1 $749.95 loan on 10/01/1991 at 15.00745% for 36 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 11/01/91 26.00 9.38 16.62 733.33 2 12/01/91 26.00 9.17 16.83 716.50 --------------- -------------- --------------- ANNUAL TOTAL 52.00 18.55 33.45 --------------- -------------- --------------- 3 01/01/92 26.00 8.96 17.04 699.46 4 02/01/92 26.00 8.75 17.25 682.21 5 03/01/92 26.00 8.53 17.47 664.74 6 04/01/92 26.00 8.31 17.69 647.05 7 05/01/92 26.00 8.09 17.91 629.14 8 06/01/92 26.00 7.87 18.13 611.01 9 07/01/92 26.00 7.64 18.36 592.65 10 08/01/92 26.00 7.41 18.59 574.06 11 09/01/92 26.00 7.18 18.82 555.24 12 10/01/92 26.00 6.94 19.06 536.18 15 ALTERNATE PAYMENT SCHEDULES Besides Monthly Payment Schedules, the Antelope Amortization program can also calculate loans with Quarterly, Semiannual, and Annual payments. QUARTERLY PAYMENTS Harold receives a loan from his father for $10,000 to be repaid in Quarterly installments over 5 years. The interest is 7%. LOAN TITLE: Loan from Father DATE OF LOAN: 12/10/1992 SUBT MO: 12 PRINCIPAL AMOUNT: 10,000.00 INTEREST RATE: 7% FREQUENCY OF PAYMENTS (M,Q,S,A): Q (for Quarterly) NUMBER OF PAYMENTS: 20 (for 5 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S The program calculates the Quarterly Payment Amount: PAYMENT AMOUNT: 596.91 AMORTIZATION SCHEDULE Loan from Father Page 1 $10,000.00 loan on 12/10/1992 at 7% for 20 Quarterly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 03/10/93 596.91 175.00 421.91 9,578.09 2 06/10/93 596.91 167.62 429.29 9,148.80 3 09/10/93 596.91 160.10 436.81 8,711.99 4 12/10/93 596.91 152.46 444.45 8,267.54 --------------- -------------- --------------- ANNUAL TOTAL 2,387.64 655.18 1,732.46 --------------- -------------- --------------- 5 03/10/94 596.91 144.68 452.23 7,815.31 6 06/10/94 596.91 136.77 460.14 7,355.17 7 09/10/94 596.91 128.72 468.19 6,886.98 8 12/10/94 596.91 120.52 476.39 6,410.59 --------------- -------------- --------------- ANNUAL TOTAL 2,387.64 530.69 1,856.95 --------------- -------------- --------------- 9 03/10/95 596.91 112.19 484.72 5,925.87 10 06/10/95 596.91 103.70 493.21 5,432.66 11 09/10/95 596.91 95.07 501.84 4,930.82 12 12/10/95 596.91 86.29 510.62 4,420.20 --------------- -------------- --------------- ANNUAL TOTAL 2,387.64 397.25 1,990.39 --------------- -------------- --------------- 16 SEMIANNUAL PAYMENTS Ronald Strump is acquiring office space in Hawaii. He has negotiated a loan of $5 million for this purpose, the terms of which call for semiannual payments over 12 years. The negotiated interest rate is 8.6%. LOAN TITLE: Strump Tower Loan DATE OF LOAN: 08/20/1993 SUBT MO: 06 PRINCIPAL AMOUNT: 5,000,000.00 INTEREST RATE: 8.6% FREQUENCY OF PAYMENTS (M,Q,S,A): S (for Semiannual) NUMBER OF PAYMENTS: 24 (for 12 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S The program calculates the Semiannual Payment Amount: PAYMENT AMOUNT: 338,083.83 AMORTIZATION SCHEDULE Strump Tower Loan Page 1 $5,000,000.00 loan on 08/20/1993 at 8.6% for 24 Semiannual Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 02/20/94 338,083.83 215,000.00 123,083.83 4,876,916.17 --------------- -------------- --------------- ANNUAL TOTAL 338,083.83 215,000.00 123,083.83 --------------- -------------- --------------- 2 08/20/94 338,083.83 209,707.40 128,376.43 4,748,539.74 3 02/20/95 338,083.83 204,187.21 133,896.62 4,614,643.12 --------------- -------------- --------------- ANNUAL TOTAL 676,167.66 413,894.61 262,273.05 --------------- -------------- --------------- 4 08/20/95 338,083.83 198,429.65 139,654.18 4,474,988.94 5 02/20/96 338,083.83 192,424.52 145,659.31 4,329,329.63 --------------- -------------- --------------- ANNUAL TOTAL 676,167.66 390,854.17 285,313.49 --------------- -------------- --------------- 6 08/20/96 338,083.83 186,161.17 151,922.66 4,177,406.97 7 02/20/97 338,083.83 179,628.50 158,455.33 4,018,951.64 --------------- -------------- --------------- ANNUAL TOTAL 676,167.66 365,789.67 310,377.99 --------------- -------------- --------------- 8 08/20/97 338,083.83 172,814.92 165,268.91 3,853,682.73 9 02/20/98 338,083.83 165,708.36 172,375.47 3,681,307.26 --------------- -------------- --------------- ANNUAL TOTAL 676,167.66 338,523.28 337,644.38 --------------- -------------- --------------- 17 ANNUAL PAYMENTS The Jones Bros. Construction Co. has received a loan of $3,400,000.00 for heavy equipment purchases. The loan is to be repaid over 10 years in 10 annual payments. Interest will be 9.855%. LOAN TITLE: Jones Bros. Heavy Equipment Loan DATE OF LOAN: 07/25/1993 SUBT MO: 12 PRINCIPAL AMOUNT: 3,400,000.00 INTEREST RATE: 9.855% FREQUENCY OF PAYMENTS (M,Q,S,A): A (for Annual) NUMBER OF PAYMENTS: 10 (for 10 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S The program calculates the Semiannual Payment Amount: PAYMENT AMOUNT: 549,892.29 AMORTIZATION SCHEDULE Jomes Bros. Heavy Equipment Loan Page 1 $3,400,000.00 loan on 07/25/1993 at 9.855% for 10 Annual Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 07/25/94 549,892.29 335,070.00 214,822.29 3,185,177.71 2 07/25/95 549,892.29 313,899.26 235,993.03 2,949,184.68 3 07/25/96 549,892.29 290,642.15 259,250.14 2,689,934.54 4 07/25/97 549,892.29 265,093.05 284,799.24 2,405,135.30 5 07/25/98 549,892.29 237,026.08 312,866.21 2,092,269.09 6 07/25/99 549,892.29 206,193.12 343,699.17 1,748,569.92 7 07/25/00 549,892.29 172,321.57 377,570.72 1,370,999.20 8 07/25/01 549,892.29 135,111.97 414,780.32 956,218.88 9 07/25/02 549,892.29 94,235.37 455,656.92 500,561.96 10 07/25/03 549,892.34 49,330.38 500,561.96 0.00 TOTALS: 5,498,922.95 2,098,922.95 3,400,000.00 ENDING THE SESSION When you have finished using the Antelope Amortization program, simply press the ESCAPE Key to end the program and return to DOS. 18 5 - AMORTIZATION SCHEDULE There are three Output Options for the Amortization Schedule. You can display ASCII File on your Hard Disk or a Floppy Diskette. it on the Screen, you can print it on your Printer, or you can output it to an OUTPUT TO SCREEN To display the Amortization Schedule on your Monitor Screen, simply reply "S" to the Output Option line on the Loan Input Screen as shown below: OUTPUT OPTION (S/P/D): S After you view each screen of the schedule, press the ENTER key to advance to the next screen. After the last screen of the schedule, pressing ENTER will return you to the Loan Input Screen. You may also end the session at any time by pressing the ESCAPE Key. OUTPUT TO PRINTER To print a hard copy of the Amortization Schedule on your Printer, reply "P" to the Output Option line on the Loan Input Screen as shown below: OUTPUT OPTION (S/P/D): P Make sure that the printer is aligned and ready to start printing at the top of a new page. Paper wide enough to print 80 columns is sufficient. Printing will continue automatically until the entire schedule is printed. OUTPUT TO AN ASCII FILE To output the Amortization Schedule to an ASCII File on your Hard Disk or a Floppy Diskette, reply "D" to the Output Option line on the Loan Input Screen as shown below: OUTPUT OPTION (S/P/D): D A new message line and reply field will then appear as follows: DISK FILE NAME: AMORTFIL.ASC You may accept this default file name or overtype it with a file name of your own. You may also include disk and directory names, for example, "A:\MY.DIR\MYOWN.FIL". The DOS rules for file names must be followed. The schedule will be written to the file in Print format. It can be read later as input data to another program, or printed using the DOS "PRINT" command. FORMAT OF SCHEDULE The Amortization Schedule is output in an 80 column format with Headings, Subheadings, Detail Lines, Subtotals, and Grand Totals. 19 HEADINGS The first Heading Line is the Report Title, "AMORTIZATION SCHEDULE". The next line displays the Loan Title Line that you entered on the Loan Input Screen. This line is centered automatically. The next line displays first the Initial Principal Amount of the loan as entered on the Principal Amount line of the Loan Input Screen, followed by the Date of the Loan from the Date of Loan input line, followed by the Interest Rate from the Interest Rate input line, followed by the Number of Payments from the Number of Payments input line, and then a description of the payment period, e.g., "Monthly Payments", as determined from the entry on the Frequency of Payments input line. SUBHEADINGS The Subheadings descriptively label the 6 detail columns displayed on the schedule. The first 3 columns (Number, Date, and Amount) describe the Payment, so they are grouped under "PAYMENT". The next 2 columns (Interest and Principal) describe how the payments are applied, so they are grouped under "APPLIED TO". The final column contains the Principal Balance and is labeled as such. DETAIL LINES The first column of the detail line displays the Payment Number. This is a sequential numbering of the payments from Payment 1 up to the final payment. The maximum number of payments is 9999. The second column of the detail line displays the Date that each payment is due. The date that the first payment is due will be one payment period (month, quarter, etc.) following the Date of the Loan as displayed in the heading. Likewise, each subsequent date will be increased by an increment of one payment period. If the Date of the Loan falls near the end of a month, for example October 31st, then subsequent payment dates will be adjusted as necessary to remain within the payment month. For example, the November payment would be due on November 30th, the February payment on February 28th or 29th, depending on whether or not it falls on a leap year. Years past the year 2000 will display as "00", "01", "02", etc. The third column displays the Amount of each Payment, usually a fixed amount, either as entered on the Payment Amount line or as computed by the program. Up to numeric 12 digits may be displayed, edited into a standard format with commas and a decimal point. Up to 15 digits will be displayed, but without commas. If the Fixed Payment to Principal Flag is on, this column will show a variable amount, the sum of the Payment Applied to Interest and the Fixed Payment Applied to Principal. The fourth column contains the Amount of the Payment Applied to Interest, as computed by the program. Up to 11 numeric digits may be displayed with commas, up to 14 digits without. The Amount of Payment Applied to Interest is computed by multiplying the Remaining Principal Balance of the preceding payment by the Periodic Interest Rate, i.e., the Annual Interest Rate as entered on the Loan Input Screen divided by the number of periods in a year. For the first payment, the Initial Principal Amount as entered on the Loan Input Screen is multiplied by the Periodic Rate. 20 The fifth column contains the Amount of the Payment Applied to Principal, as computed by the program. Up to 12 numeric digits may be displayed with commas, up to 15 digits without. The Amount of Payment Applied to Principal is computed by subtracting the Amount of Payment Applied to Interest, as computed above, from the Payment Amount. If the Fixed Payment to Principal Flag is on, this column will show the fixed amount entered on the Payment Amount line. The sixth column displays the Remaining Principal Balance, after the current payment has been applied. Up to 12 numeric digits may be displayed with commas, up to 15 digits without. The Remaining Principal Balance for the first payment is calculated by subtracting the Amount of Payment Applied to Principal for the first payment from the Initial Principal Amount as entered on the Loan Input Screen. Subsequently, the Remaining Principal Balance for each payment is calculated by subtracting the Amount of Payment Applied to Principal for that payment from the Remaining Principal Balance of the preceding payment. SUBTOTALS Annual Totals are produced at the Subtotal level. The lines are identified by the label "ANNUAL TOTAL" at the beginning of the line. The columns totaled are the third, fourth, and fifth, that is, the Payment Amount column, the Amount Applied to Interest column, and the Amount Applied to Principal column. Annual Totals occur after the month specified in the Subtotal Month field of the Loan Input Screen. The default month is December. GRAND TOTAL At the end of the Amortization Schedule an overall total line is produced labeled "TOTALS:". Totals are displayed for the Payment Amount, Amount Applied to Interest, and Amount Applied to Principal columns. 21 6 - TECHNIQUES This chapter covers some of the practical techniques that can be used in conjunction with the Antelope Amortization Program to produce the desired results for situations that require variations to the basic Amortization Schedule format. BALLOON PAYMENTS Suppose you are selling your home and in order to close the deal you agree to carry a Second Mortgage for the amount of $10,000.00 at 10% interest. The loan is to be amortized over 30 years with monthly payments for five years, at the end of which a Balloon Payment to include the Remaining Principal Balance will be due. First enter the loan information as follows with 360 entered for Number of Payments: LOAN TITLE: Home Second Mortgage Loan DATE OF LOAN: 06/01/1995 SUBT MO: 12 PRINCIPAL AMOUNT: 10,000.00 INTEREST RATE: 10% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 360 (for 30 years) PAYMENT AMOUNT: OUTPUT OPTION (S/P/D): S After entering the Output Option, the program will calculate the Payment Amount required to amortize the loan over 30 years. PAYMENT AMOUNT: 87.76 Now use the ARROW UP key to move the cursor back to the Number of Payments line and change the entry to 60 (for 5 years). Use the DOWN ARROW or ENTER key to move the cursor back down. You may enter the Output Option you prefer, respond "Y" to the Screen Verification message, and the Amortization Schedule will be generated, showing 59 payments of $87.76 and a final Balloon Payment of $9,744.98, which includes $80.54 Interest and the Remaining Principal Balance of $9,664.44. 22 AMORTIZATION SCHEDULE Home Second Mortgage Loan Page 1 $10,000.00 loan on 06/01/1995 at 10% for 60 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 07/01/95 87.76 83.33 4.43 9,995.57 2 08/01/95 87.76 83.30 4.46 9,991.11 3 09/01/95 87.76 83.26 4.50 9,986.61 4 10/01/95 87.76 83.22 4.54 9,982.07 5 11/01/95 87.76 83.18 4.58 9,977.49 6 12/01/95 87.76 83.15 4.61 9,972.88 --------------- -------------- --------------- ANNUAL TOTAL 526.56 499.44 27.12 --------------- -------------- --------------- 7 01/01/96 87.76 83.11 4.65 9,968.23 8 02/01/96 87.76 83.07 4.69 9,963.54 9 03/01/96 87.76 83.03 4.73 9,958.81 10 04/01/96 87.76 82.99 4.77 9,954.04 11 05/01/96 87.76 82.95 4.81 9,949.23 12 06/01/96 87.76 82.91 4.85 9,944.38 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 49 07/01/99 87.76 81.17 6.59 9,733.47 50 08/01/99 87.76 81.11 6.65 9,726.82 51 09/01/99 87.76 81.06 6.70 9,720.12 52 10/01/99 87.76 81.00 6.76 9,713.36 53 11/01/99 87.76 80.94 6.82 9,706.54 54 12/01/99 87.76 80.89 6.87 9,699.67 --------------- -------------- --------------- ANNUAL TOTAL 1,053.12 974.31 78.81 --------------- -------------- --------------- 55 01/01/00 87.76 80.83 6.93 9,692.74 56 02/01/00 87.76 80.77 6.99 9,685.75 57 03/01/00 87.76 80.71 7.05 9,678.70 58 04/01/00 87.76 80.66 7.10 9,671.60 59 05/01/00 87.76 80.60 7.16 9,664.44 60 06/01/00 9,744.98 80.54 9,664.44 0.00 --------------- -------------- --------------- ANNUAL TOTAL 10,183.78 484.11 9,699.67 --------------- -------------- --------------- TOTALS: 14,922.82 4,922.82 10,000.00 23 INTEREST ONLY LOANS Suppose a retail store has obtained a $200,000.00 bank loan to increase its inventory for the holiday season. The terms of the loan specify that interest only payments are to be made monthly until after 4 months, when the Principal Amount is to be repaid. Interest will be 14%. Enter the loan information as usual except for Payment Amount. Enter a Zero for Payment Amount and then press function key F2 instead of the ENTER Key. You will see the "P" flag appear to the right of the field. Function Key F2 tells the program to interpret the amount entered in the Payment Amount field as the Amount Applied to Principal instead of as the total Payment Amount. In this case the amount to be applied to the principal is zero. Now use the Up Arrow Key to move the cursor back to the Payment Amount Field. This time press Function Key F4. Now you will see the "H" flag appear to the right of the field. This tells the program to Hold the Zero Amount and not to calculate a different Payment Amount. LOAN TITLE: Inventory Loan DATE OF LOAN: 10/01/1992 SUBT MO: 06 PRINCIPAL AMOUNT: 200,000.00 INTEREST RATE: 14% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 4 PAYMENT AMOUNT: 0 HP OUTPUT OPTION (S/P/D): S The Amortization Schedule generated will show 3 monthly interest payments of $2,333.33 and a final balloon payment of $202,333.33. AMORTIZATION SCHEDULE Inventory Loan Page 1 $200,000.00 loan on 10/01/1992 at 14% for 4 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 11/01/92 2,333.33 2,333.33 0.00 200,000.00 2 12/01/92 2,333.33 2,333.33 0.00 200,000.00 3 01/01/93 2,333.33 2,333.33 0.00 200,000.00 4 02/01/93 202,333.33 2,333.33 200,000.00 0.00 --------------- -------------- --------------- ANNUAL TOTAL 209,333.32 9,333.32 200,000.00 --------------- -------------- --------------- TOTALS: 209,333.32 9,333.32 200,000.00 24 INTEREST FREE LOANS Joan's parents loaned her $5,000.00 to buy a car. They will charge no interest, but would like her to pay it back in monthly installments of $125.00. In order to keep track of her payments, she would like to have a schedule. Enter the loan information, entering Zero for Interest Rate and Number of Payments. When the cursor is in the Interest Rate field, press F4 instead of the Enter Key to tell the program to Hold the 0% Interest Rate and not to calculate a different Rate. You will see the "H" flag appear to the right of the field. LOAN TITLE: Joan's Loan DATE OF LOAN: 12/25/1991 SUBT MO: 12 PRINCIPAL AMOUNT: 5,000.00 INTEREST RATE: 0% H FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 0 PAYMENT AMOUNT: 125.00 OUTPUT OPTION (S/P/D): S The program will calculate the number of payments required to pay off the loan. NUMBER OF PAYMENTS: 40 AMORTIZATION SCHEDULE Joan's Loan Page 1 $5,000.00 loan on 12/25/1991 at 0% for 40 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 01/25/92 125.00 0.00 125.00 4,875.00 2 02/25/92 125.00 0.00 125.00 4,750.00 3 03/25/92 125.00 0.00 125.00 4,625.00 4 04/25/92 125.00 0.00 125.00 4,500.00 5 05/25/92 125.00 0.00 125.00 4,375.00 6 06/25/92 125.00 0.00 125.00 4,250.00 7 07/25/92 125.00 0.00 125.00 4,125.00 8 08/25/92 125.00 0.00 125.00 4,000.00 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 37 01/25/95 125.00 0.00 125.00 375.00 38 02/25/95 125.00 0.00 125.00 250.00 39 03/25/95 125.00 0.00 125.00 125.00 40 04/25/95 125.00 0.00 125.00 0.00 --------------- -------------- --------------- ANNUAL TOTAL 500.00 0.00 500.00 --------------- -------------- --------------- TOTALS: 5,000.00 0.00 5,000.00 25 FIXED PRINCIPAL PAYMENT Consider a loan agreement which requires the borrower to repay a fixed amount of the principal with every payment. In addition, he is to pay whatever interest is due. Thus the payments will not be fixed, but will decline over the term of the loan. Suppose the loan is for 25,000.00 and is to be repaid quarterly over 5 years. From each payment, $1250.00 is to be applied to the principal. Interest will be 11.625%. When entering the Payment Amount, press function key F2 instead of the ENTER key to cause the program to interpret the Amount as the Payment Applied to Principal instead of as the total Payment Amount. You will see the "P" flag appear to the right of the field. LOAN TITLE: ACME Loan DATE OF LOAN: 01/02/1998 SUBT MO: 12 PRINCIPAL AMOUNT: 25,000.00 INTEREST RATE: 11.625% FREQUENCY OF PAYMENTS (M,Q,S,A): Q NUMBER OF PAYMENTS: 20 PAYMENT AMOUNT: 1250.00 P OUTPUT OPTION (S/P/D): S AMORTIZATION SCHEDULE ACME Loan Page 1 $25,000.00 loan on 01/02/1998 at 11.625% for 20 Quarterly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 04/02/98 1,976.56 726.56 1,250.00 23,750.00 2 07/02/98 1,940.23 690.23 1,250.00 22,500.00 3 10/02/98 1,903.91 653.91 1,250.00 21,250.00 --------------- -------------- --------------- ANNUAL TOTAL 5,820.70 2,070.70 3,750.00 --------------- -------------- --------------- 4 01/02/99 1,867.58 617.58 1,250.00 20,000.00 5 04/02/99 1,831.25 581.25 1,250.00 18,750.00 6 07/02/99 1,794.92 544.92 1,250.00 17,500.00 7 10/02/99 1,758.59 508.59 1,250.00 16,250.00 --------------- -------------- --------------- ANNUAL TOTAL 7,252.34 2,252.34 5,000.00 --------------- -------------- --------------- 8 01/02/00 1,722.27 472.27 1,250.00 15,000.00 9 04/02/00 1,685.94 435.94 1,250.00 13,750.00 10 07/02/00 1,649.61 399.61 1,250.00 12,500.00 11 10/02/00 1,613.28 363.28 1,250.00 11,250.00 --------------- -------------- --------------- ANNUAL TOTAL 6,671.10 1,671.10 5,000.00 --------------- -------------- --------------- 12 01/02/01 1,576.95 326.95 1,250.00 10,000.00 26 ADJUSTABLE RATE MORTGAGES Adjustable Rate Mortgages and other variable rate loans can be computed by doing a loan computation and generating a schedule for each phase of the loan. Consider the following example. The Stevensons are buying a home with a $100,000.00 Adjustable Rate Mortgage (ARM) to be paid off over 30 years. The terms of the ARM are that the initial interest rate is to be 6.25%, then after 2 years, it will increase to 8.25%. After 3 more years at this rate, it will increase again to 10.25% and remain there for the remainder of the loan. To calculate the payments for the first 2 years, enter the information as follows: LOAN TITLE: Stevensons' ARM Home Loan DATE OF LOAN: 03/01/1991 SUBT MO: 12 PRINCIPAL AMOUNT: 100,000.00 INTEREST RATE: 6.25% (phase 1 interest rate) FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 360 (amortize over 30 years) PAYMENT AMOUNT: 0 OUTPUT OPTION (S/P/D): S After entering the Output Option, the program will calculate the Payment Amount required for the first 2 years, amortizing over 30 years. PAYMENT AMOUNT: 615.72 Now use the Up Arrow Key to move the cursor back to the Number of Payments line and change the entry to 24 (for 2 years). Use the Down Arrow or Enter Key to move the cursor back down, respond "Y" to the Screen Verification Message, and the Amortization Schedule will be generated for the first 2 years. AMORTIZATION SCHEDULE Stevensons' ARM Home Loan Page 1 $100,000.00 loan on 03/01/1991 at 6.25% for 360 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 04/01/91 615.72 520.83 94.89 99,905.11 2 05/01/91 615.72 520.34 95.38 99,809.73 3 06/01/91 615.72 519.84 95.88 99,713.85 4 07/01/91 615.72 519.34 96.38 99,617.47 5 08/01/91 615.72 518.84 96.88 99,520.59 6 09/01/91 615.72 518.34 97.38 99,423.21 7 10/01/91 615.72 517.83 97.89 99,325.32 8 11/01/91 615.72 517.32 98.40 99,226.92 9 12/01/91 615.72 516.81 98.91 99,128.01 --------------- -------------- --------------- ANNUAL TOTAL 5,541.48 4,669.49 871.99 --------------- -------------- --------------- 27 10 01/01/92 615.72 516.29 99.43 99,028.58 11 02/01/92 615.72 515.77 99.95 98,928.63 12 03/01/92 615.72 515.25 100.47 98,828.16 13 04/01/92 615.72 514.73 100.99 98,727.17 14 05/01/92 615.72 514.20 101.52 98,625.65 15 06/01/92 615.72 513.68 102.04 98,523.61 16 07/01/92 615.72 513.14 102.58 98,421.03 17 08/01/92 615.72 512.61 103.11 98,317.92 18 09/01/92 615.72 512.07 103.65 98,214.27 19 10/01/92 615.72 511.53 104.19 98,110.08 20 11/01/92 615.72 510.99 104.73 98,005.35 21 12/01/92 615.72 510.44 105.28 97,900.07 --------------- -------------- --------------- ANNUAL TOTAL 7,388.64 6,160.70 1,227.94 --------------- -------------- --------------- 22 01/01/93 615.72 509.90 105.82 97,794.25 23 02/01/93 615.72 509.35 106.37 97,687.88 24 03/01/93 615.72 508.79 106.93 97,580.95 Make a note of the Principal Balance Remaining at the end of 24 months. Return to the Loan Input Screen and enter this amount in the Principal Amount field. Enter 8.25 in the Interest Rate field and 336 in the Number of Payments field. LOAN TITLE: Stevensons' ARM Home Loan DATE OF LOAN: 03/01/1993 SUBT MO: 12 PRINCIPAL AMOUNT: 97,580.95 (balance after 2 years) INTEREST RATE: 8.25% (phase 2 interest rate) FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 336 (total remaining payments) PAYMENT AMOUNT: 0 OUTPUT OPTION (S/P/D): S After entering the Output Option, the program will calculate the Payment Amount required for the next 3 years, amortizing over the remaining 28 years of the loan. PAYMENT AMOUNT: 745.45 Now use the Up Arrow Key to move the cursor back to the Number of Payments line and change the entry to 36 (for 3 years). Use the Down Arrow or Enter Key to move the cursor back down, respond "Y" to the Screen Verification Message, and the Amortization Schedule will be generated for the next 3 years. 28 AMORTIZATION SCHEDULE Stevensons' ARM Home Loan Page 1 $97,580.95 loan on 03/01/1993 at 8.25% for 336 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 04/01/93 745.45 670.87 74.58 97,506.37 2 05/01/93 745.45 670.36 75.09 97,431.28 3 06/01/93 745.45 669.84 75.61 97,355.67 4 07/01/93 745.45 669.32 76.13 97,279.54 5 08/01/93 745.45 668.80 76.65 97,202.89 6 09/01/93 745.45 668.27 77.18 97,125.71 7 10/01/93 745.45 667.74 77.71 97,048.00 8 11/01/93 745.45 667.21 78.24 96,969.76 9 12/01/93 745.45 666.67 78.78 96,890.98 --------------- -------------- --------------- ANNUAL TOTAL 6,709.05 6,019.08 689.97 --------------- -------------- --------------- 10 01/01/94 745.45 666.13 79.32 96,811.66 11 02/01/94 745.45 665.58 79.87 96,731.79 12 03/01/94 745.45 665.03 80.42 96,651.37 13 04/01/94 745.45 664.48 80.97 96,570.40 14 05/01/94 745.45 663.92 81.53 96,488.87 15 06/01/94 745.45 663.36 82.09 96,406.78 16 07/01/94 745.45 662.80 82.65 96,324.13 17 08/01/94 745.45 662.23 83.22 96,240.91 18 09/01/94 745.45 661.66 83.79 96,157.12 19 10/01/94 745.45 661.08 84.37 96,072.75 20 11/01/94 745.45 660.50 84.95 95,987.80 21 12/01/94 745.45 659.92 85.53 95,902.27 --------------- -------------- --------------- ANNUAL TOTAL 8,945.40 7,956.69 988.71 --------------- -------------- --------------- 22 01/01/95 745.45 659.33 86.12 95,816.15 23 02/01/95 745.45 658.74 86.71 95,729.44 24 03/01/95 745.45 658.14 87.31 95,642.13 25 04/01/95 745.45 657.54 87.91 95,554.22 26 05/01/95 745.45 656.94 88.51 95,465.71 27 06/01/95 745.45 656.33 89.12 95,376.59 28 07/01/95 745.45 655.71 89.74 95,286.85 29 08/01/95 745.45 655.10 90.35 95,196.50 30 09/01/95 745.45 654.48 90.97 95,105.53 31 10/01/95 745.45 653.85 91.60 95,013.93 32 11/01/95 745.45 653.22 92.23 94,921.70 33 12/01/95 745.45 652.59 92.86 94,828.84 --------------- -------------- --------------- ANNUAL TOTAL 8,945.40 7,871.97 1,073.43 --------------- -------------- --------------- 34 01/01/96 745.45 651.95 93.50 94,735.34 35 02/01/96 745.45 651.31 94.14 94,641.20 36 03/01/96 745.45 650.66 94.79 94,546.41 29 Again make note of the Principal Balance Remaining at the end of the schedule. Return to the Loan Input Screen and enter this amount in the Principal Amount field. Enter 10.25 in the Interest Rate field and 300 in the Number of Payments field. LOAN TITLE: Stevensons' ARM Home Loan DATE OF LOAN: 03/01/1996 SUBT MO: 12 PRINCIPAL AMOUNT: 94,546.41 (balance after 5 years) INTEREST RATE: 10.25% (phase 3 interest rate) FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 300 (total remaining payments) PAYMENT AMOUNT: 0 OUTPUT OPTION (S/P/D): S After entering the Output Option, the program will calculate the Payment Amount required for the remaining 25 years of the loan. PAYMENT AMOUNT: 875.86 Respond "Y" to the Screen Verification Message, and the Amortization Schedule will be generated for the remainder of the loan. AMORTIZATION SCHEDULE Stevensons' ARM Home Loan Page 1 $94,546.41 loan on 03/01/1996 at 10.25% for 300 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 04/01/96 875.86 807.58 68.28 94,478.13 2 05/01/96 875.86 807.00 68.86 94,409.27 3 06/01/96 875.86 806.41 69.45 94,339.82 4 07/01/96 875.86 805.82 70.04 94,269.78 5 08/01/96 875.86 805.22 70.64 94,199.14 6 09/01/96 875.86 804.62 71.24 94,127.90 7 10/01/96 875.86 804.01 71.85 94,056.05 8 11/01/96 875.86 803.40 72.46 93,983.59 9 12/01/96 875.86 802.78 73.08 93,910.51 --------------- -------------- --------------- ANNUAL TOTAL 7,882.74 7,246.84 635.90 --------------- -------------- --------------- 10 01/01/97 875.86 802.15 73.71 93,836.80 11 02/01/97 875.86 801.52 74.34 93,762.46 12 03/01/97 875.86 800.89 74.97 93,687.49 30 ADDITIONAL PAYMENTS The Johnstones have been paying for 10 years on a 30 year home mortgage. With 20 years left to pay, they would like to know how much sooner the loan would be paid off if they made an additional payment of $5,000.00. Assume that there would be no penalty involved for this amount. The original amount of the loan was $36,000.00 and the interest rate is 11.25% First produce an amortization schedule for the original loan. Enter the information as follows: LOAN TITLE: Johnstones' Home Loan DATE OF LOAN: 04/14/1980 SUBT MO: 12 PRINCIPAL AMOUNT: 36,000.00 INTEREST RATE: 11.25% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 360 PAYMENT AMOUNT: 0 OUTPUT OPTION (S/P/D): S After entering the Output Option, the program will calculate the Payment Amount required: PAYMENT AMOUNT: 349.65 Respond "Y" to the Screen Verification Message to generate the Amortization Schedule: AMORTIZATION SCHEDULE Johnstones' Home Loan Page 1 $36,000.00 loan on 04/14/1980 at 11.25% for 360 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 05/14/80 349.65 337.50 12.15 35,987.85 2 06/14/80 349.65 337.39 12.26 35,975.59 3 07/14/80 349.65 337.27 12.38 35,963.21 4 08/14/80 349.65 337.16 12.49 35,950.72 5 09/14/80 349.65 337.04 12.61 35,938.11 6 10/14/80 349.65 336.92 12.73 35,925.38 7 11/14/80 349.65 336.80 12.85 35,912.53 8 12/14/80 349.65 336.68 12.97 35,899.56 --------------- -------------- --------------- ANNUAL TOTAL 2,797.20 2,696.76 100.44 --------------- -------------- --------------- 31 9 01/14/81 349.65 336.56 13.09 35,886.47 10 02/14/81 349.65 336.44 13.21 35,873.26 11 03/14/81 349.65 336.31 13.34 35,859.92 12 04/14/81 349.65 336.19 13.46 35,846.46 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 118 02/14/90 349.65 313.45 36.20 33,398.29 119 03/14/90 349.65 313.11 36.54 33,361.75 120 04/14/90 349.65 312.77 36.88 33,324.87 Find in the schedule the Principal Balance Remaining after 120 payments (10 years). Subtract the amount of the additional payment from this Remaining Balance and enter the result in Principal Amount Field of the Loan Information Screen (Remaining Balance = 33,324.87; Additional Payment = 5,000.00; Amount to enter in Principal Amount field = 33,324.87 - 5,000.00 = 28,324.87). Leave the Number of Payments Field equal to Zero in order to allow the program to calculate the time needed to pay off the loan. Enter the same amounts in the Interest Rate and Payment Amount fields as in the original loan schedule. LOAN TITLE: Johnstones' Home Loan DATE OF LOAN: 04/14/1990 SUBT MO: 12 PRINCIPAL AMOUNT: 28,324.87 INTEREST RATE: 11.25% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 0 PAYMENT AMOUNT: 349.65 OUTPUT OPTION (S/P/D): S After entering the Output Option, the program will calculate the Number of Payments required: NUMBER OF PAYMENTS: 153 Subtracting 153 from the original remaining number of payments, 240, the difference is 87 months. Therefore, the loan can be paid off 7 years and 3 months early, if the Johnstones decide to make the extra $5,000.00 payment. 32 NEGATIVE AMORTIZATION The Bensons are a retired couple. The bank has allowed them a $70,000.00 loan on their home at 10% interest with monthly payments of $500.00. This loan will amortize negatively over 20 years, the bank assuming that the value of the home will continue to rise sufficiently to cover the balance due. Enter all information including the Payment Amount: LOAN TITLE: Bensons' Home Loan DATE OF LOAN: 09/15/1994 SUBT MO: 12 PRINCIPAL AMOUNT: 70,000.00 INTEREST RATE: 10% FREQUENCY OF PAYMENTS (M,Q,S,A): M NUMBER OF PAYMENTS: 240 PAYMENT AMOUNT: 500.00 OUTPUT OPTION (S/P/D): S Respond "Y" to the Screen Verification Message to generate the Amortization Schedule: AMORTIZATION SCHEDULE Bensons' Home Loan Page 1 $70,000.00 loan on 09/15/1994 at 10% for 240 Monthly Payments ------------PAYMENT----------- -------------APPLIED TO-------- ------PRINCIPAL NUMB DATE AMOUNT INTEREST PRINCIPAL BALANCE ---- -------- --------------- -------------- --------------- --------------- 1 10/15/94 500.00 583.33 -83.33 70,083.33 2 11/15/94 500.00 584.03 -84.03 70,167.36 3 12/15/94 500.00 584.73 -84.73 70,252.09 --------------- -------------- --------------- ANNUAL TOTAL 1,500.00 1,752.09 -252.09 --------------- -------------- --------------- 4 01/15/95 500.00 585.43 -85.43 70,337.52 5 02/15/95 500.00 586.15 -86.15 70,423.67 6 03/15/95 500.00 586.86 -86.86 70,510.53 7 04/15/95 500.00 587.59 -87.59 70,598.12 8 05/15/95 500.00 588.32 -88.32 70,686.44 9 06/15/95 500.00 589.05 -89.05 70,775.49 10 07/15/95 500.00 589.80 -89.80 70,865.29 11 08/15/95 500.00 590.54 -90.54 70,955.83 12 09/15/95 500.00 591.30 -91.30 71,047.13 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 230 11/15/13 500.00 1,057.40 -557.40 127,444.85 231 12/15/13 500.00 1,062.04 -562.04 128,006.89 --------------- -------------- --------------- ANNUAL TOTAL 6,000.00 12,446.22 -6,446.22 --------------- -------------- --------------- 33 232 01/15/14 500.00 1,066.72 -566.72 128,573.61 233 02/15/14 500.00 1,071.45 -571.45 129,145.06 234 03/15/14 500.00 1,076.21 -576.21 129,721.27 235 04/15/14 500.00 1,081.01 -581.01 130,302.28 236 05/15/14 500.00 1,085.85 -585.85 130,888.13 237 06/15/14 500.00 1,090.73 -590.73 131,478.86 238 07/15/14 500.00 1,095.66 -595.66 132,074.52 239 08/15/14 500.00 1,100.62 -600.62 132,675.14 240 09/15/14 133,780.77 1,105.63 132,675.14 0.00 --------------- -------------- --------------- ANNUAL TOTAL 137,780.77 9,773.88 128,006.89 --------------- -------------- --------------- TOTALS: 253,280.77 183,280.77 70,000.00 As you can see, the loan Amortizes Negatively, leaving at the end of 20 years a Balloon Payment of $132,675.14.