Calculate Mortgages and Loans with the TI-84’s TVM Solver

By Jeff McCalla, C. C. Edwards

Before you start using the TVM Solver on your TI-84 Plus calculator, you need to know a few of the basics. Here is a list of TVM variables:

  • N: Total number of payments. An easy way to calculate this is to multiply the P/Y times the number of years.

  • I%: Annual interest rate. Always enter this rate as a percentage!

  • PV: Present value. This is how much you invest or the amount of the loan.

  • PMT: Payment amount.

  • FV: Future value. This is your savings goal or if you are calculating loans, your loan balance at the end of the loan.

  • P/Y: Number of payment periods per year.

  • C/Y: Number of compounding periods/year.

In this example, use the TVM Solver to answer this question:

The average home price in Memphis, Tennessee, is $154,985. If the interest rate on a 30-year loan in 4.73%, what will the monthly payment be?

Step 1. Access the TVM Solver

Follow these steps to access the TVM Solver:

  1. Press [APPS] to access the apps that are loaded on your calculator.

    See the first screen.

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  2. Press [1] or [ENTER] to start the Finance app.

    See the second screen.

  3. Press [1] or [ENTER] to display the TVM Solver.

    See the third screen.

Step 2. Enter values for five of the six TVM variables

When entering values, you must keep in mind the cash flow convention. If you are getting money (like a mortgage or loan), values are entered as positive numbers. If you are investing money, values are entered as negative numbers. The cash flow convention could affect the sign of these three TVM variables: PV, PMT, and FV.

P/Y and C/Y are basically the same variable. If you enter a value for P/Y, C/Y automatically changes to match. You can change the value of C/Y to make it a unique value, but in most cases, these two variables end up being identical. To use the TVM Solver, enter values for five of the six TVM variables with the information that was given to you in the problem presented.

Here are steps to enter values for five of the variables.

  1. Enter N.

    How many mortgage payments are there over the life of the loan? Twelve payments a year for 30 years. If you enter the expression 12*30, your calculator will evaluate the expression when you use the down-arrow key or press [ENTER] to move to the next field.

  2. Enter I%.

    4.73% is entered as 4.73.

  3. Enter PV.

    The present value in this problem is the amount of money of the loan; $154,985 is entered as 154985.00.

  4. Enter PMT.

    Isn’t this what you’re trying to find? You aren’t allowed to leave a field blank, so leave the default value of 0.

  5. Enter FV.

    The future value is the amount of money you still have to pay after the 30-year term, which is 0.

  6. Enter P/Y and C/Y.

    Mortgages have monthly payments and are compounded monthly, so enter 12.

  7. Highlight PMT: END or BEGIN.

    This problem does not specify if the payment is at the beginning or end of the month. The default setting assumes payments are at the end of the month. Use the left- and right-arrow keys to move your cursor to END and press [ENTER] to highlight. See the first screen.

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Step 3. Solve for the missing TVM variable

Look back at what the question is asking: “What will the monthly payment be?”

You use the up- and down-arrow keys to place your cursor on the value you would like to solve for and press [ALPHA][ENTER]. So, move the cursor to the PMT value and press [ALPHA][ENTER].

See the second screen. Notice the small box next to the PMT value, indicating that you solved for that variable. Why is the value negative? Paying a mortgage is a cash outflow, so it must be negative according to the cash flow convention.

Before using TVM Solver, it may be a good idea to press [MODE] to change the mode of your calculator to Float to 2 as shown in the third screen. This will automatically round any values to the hundredths place. Since the TVM Solver works with monetary values, everything will be rounded to the nearest penny.