Section 3: Basic Financial Functions 45File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 45 of 209Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cmExample 1: You’re financing a new car purchase with a loan from an institutionthat requires 15% interest compounded monthly over the 4-year term of the loan. Ifyou can make payments of $150 at the end of each month and your downpayment will be $1,500, what is the maximum price you can pay for the car?(Assume the purchase date is one month prior to the date of the first payment.)Keystrokes DisplayfCLEARG4gA 48.00 Calculates and stores n.15gC 1.25 Calculates and stores i.150ÞP –150.00 Stores PMT (with minus sign for cashpaid out).g –150.00 Sets payment mode to End.$ 5,389.72 Maximum amount of loan.1500+ 6,889.72 Maximum purchase price.Example 2: A development company would like to purchase a group ofcondominiums with an annual net cash flow of $17,500. The expected holdingperiod is 5 years, and the estimated selling price at that time is $540,000.Calculate the maximum amount the company can pay for the condominiums inorder to realize at least a 12% annual yield.
