Calculator Tip: How To Figure Out Monthly Payment

In a prior post, I went over different financial calculators which is a necessary tool needed in the world of mobile home investing.

Personally, I use the HP 10B II. I like the long vertical shape as opposed to the HP 12C, which is more of a horizontal shape. Plus, it's less pricey than the HP 12C. If you are just starting out and just need a basic financial calculator, the HP 10B II would be fine.

Back to the financial calculator. When calculating the monthly payment, you will need 4 variables:

1. The present value (PV) - What is the sales price?
2. Interest (I/YR) - How much interest are you charging?
3. Number of Months (N) - How many months?
4. Future Value (FV) - Usually, this is the amount after everything has been paid off, usually "0".

Once you have all the above variables, then you can calculate the monthly payment.

For example, say you have a mobile home you are selling for $10,000 at 12.75% interest for 4 years. Let's plug in the numbers:

PV =10,000
I/YR = 12.75
N = 48
FV= 0

On your financial calculator, make sure everything has been cleared. Then, start punching in the numbers like this:

1. Punch in 10,000 and then the PV button.
2. Plug in 12.75 for I/YR button.
3. For N, I put the number of months. (Remember to make sure your P/YR (payments per year) which is the same button is set to 1 since it's annual interest, not compounded monthly or quarterly).
4. Plug in "0" for FV
5. Then you're ready to figure out the payment. Hit the PMT button to get $267.03.

If you didn't get $267.03 for the PMT, go back and try again. Remember, you should always double check your work - you can always do a financial calculation online or get a financial calculator program for your computer.

Happy calculating!

Which Financial Calculator Is Best For You?

In the world of mobile home investing, a financial calculator is one tool you will definitely need.

When you sell a mobile home on owner financing, you will need to calculate the monthly payment for the end buyer - a financial calculator will help you do this. In addition, it will also help you to figure out the amortization on the notes you create on your deals. So, how will a financial calculator help accomplish this goal?

In order to calculate the monthly payment for your end buyer, you will need to have a 4 variables:

1. Present Value (PV) - What is the sales price?
2. Interest (I/YR) - How much annual interest are you charging?
3. Number of Months (N) - How many months?
4. Future Value (FV) - Usually, this is the amount after everything has been paid off, usually "0"

Once you have all the above variables, then you can calculate the monthly payment (PMT).

If you are trying to determine a different variable above, you can always calculate to find out the 4th variable as long as you have at least 3 variables. I'll be covering exactly how to calculate these variables in a future post. I just wanted to show you how a financial calculator can help you.

Now, you know why you need a financial calculator. So, which one should you choose?

There are an array of financial calculators out there to choose from. It's all a matter of preference. However, I can point out the top two financial calculators most people use. They are the HP 10B II and the HP 12C.

Personally, I use the HP 10B II. I like the long vertical shape as opposed to the HP 12C, which is more of a horizontal shape. Plus, it's less pricey than the HP 12C. If you are just starting out and just need a basic financial calculator, the HP 10B II would be fine. Here is a picture of the HP 10B II:



However, I know of some people who do use the HP 12C who do some more involved calculations especially with commercial real estate transactions. Here's the HP 12C:



I will be posting a review in the future on the HP 10B II and the various calculations you will need to know for the mobile home investing business. In the meantime, if you would like to read more about the calculators I suggest checking out the reviews on the links above to see which one is best for you.

Happy calculating!

Poll

Which financial calculator do you use?
	I use a regular, good old fashioned calculator.
	Definitely an HP 10B II.
	Calculator? I write everything on paper.
	I prefer the HP 12C.
	The Texas Instruments BA II.
	I do not use a calculator. All my calculations are done in my head!
	Still trying to figure out which one to get. I need help deciding!
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