How to Calculate Mortgage Payments Using the HP 12C Calculator

The HP 12C calculator lets you figure out your mortgage payments quickly.

The Hewlett-Packard 12C calculator is a type of financial calculator, which lets you do quick and simple calculations with complex financial formulas. One such formula is mortgage payments. Instead of using the formula for mortgage payments ([i * A] / 1 - (1 + i) ^ -n), the user only needs to enter the individual variables into the HP 12C calculator and it will automatically calculate the payment amount. This helps financial planners compare different loan options faster than using the formula.

Step 1

Type in the interest rate on the mortgage and then press "g," then "12÷." This will record the interest rate in the calculator.

For example, a person has a $100,000 mortgage with a 10 percent interest rate and 25 years to repay it. Press "1," "0," "g," then "12÷."

Step 2

Enter the years of the mortgage and then press "g," then "12X." This will record the years in the calculator. In the example, press "2," "5," "g," then "12X."

Step 3

Press the amount borrowed on the mortgage, then press "PV." "PV" stands for the present value of the mortgage; this is the amount of capital remaining on the loan. In the example, press "1," "0," "0," "0," "0," "0," then "PV."

Step 4

Enter "0," then "FV." "FV" is the future value of the mortgage. This value will always be zero, because you will want to pay off the total amount of the mortgage. In the example, press "0," then "FV."

Step 5

Press "PMT," which is the payment button. Since you filled out all the other variables of the mortgage in the previous steps, pressing "PMT" will solve for the last remaining variable. In the example, when you press "PMT," "908.70" will display on the calculator. This is your mortgage payment: $908.70.