CFA Level 1: Calculating Monthly Payment for Debt

Monthly Payment for $12,500 Debt with 12% Interest Rate

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Question

What monthly payment is required over the next 60 months to pay off a $12,500 debt today, if interest is charged at 12% per year, compounded monthly?

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E

On the BAII Plus, press 60 N, 12 divide 12 = I/Y, 12500 PV, 0 FV, CPT PMT. On the HP12C, press 60 n, 12 ENTER 12 divide i, 12500 PV, 0 FV, PMT. Make sure the BAII Plus has the P/Y value set to 1. Note that the answer will be displayed as a negative number.