Hi. This is Kyle from in-a-day development welcome to our video tutorial on PMT or payment PMT or payment represents the amount of your regular payment which is often unplayed for this example I want to get a 48-month car loan at five point five percent interest and I have four thousand dollars to put down the car is worth twenty seven thousand five hundred dollars at the end of the loan I get the pink slip to the car and now nothing what's my monthly payment because these are monthly payments I make sure that pyr is 12 you can see your pyr setting in the bottom of your calculators display next the loan will be a 48-month loan.
I put 48 into n the interest rate as noted earlier is 5.5 percent per year.
I put 5.5 int I 0 ir the car is worth twenty seven thousand five hundred dollars which means that I'm receiving 27 thousand five hundred dollars of value but at the same time I'm paying out four thousand dollars for the down payment.
I'm giving up four thousand dollars of value. This means my net increase in value at present is twenty-three thousand five hundred dollars since it is a net increase I put positive 23,500 into PV I'm going to own the car free and clear when the 48 months are up.
I put 0 + FV then I hit PMT to find out what my payment is PMT comes up as negative five 46.5 three.
I have a car payment of five hundred and forty six dollars and 53 cents the number is negative because. This is money i am paying out each month if the loan were 60 months instead what would my payment be since only one aspect of the question changes i can change just that one number and recalculate i put 60 in 2 n then hit PMT again if my loan is 60 months 5 years then my payment is four hundred and forty eight dollars and eighty eight cents instead by extending the loan another year I reduce my payment by nearly one hundred dollars per month is that a good deal that's for you to decide thanks for watching and make sure to get your 10b to financial calculator app from the App Store for iPhone iPad Android and Mac OS if you have any questions about this example please feel free to email us at the team at in-a-day development calm.