Content
Loans
Want a deeper conceptual understanding? Try our interactive lesson!
Exercises
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Want a deeper conceptual understanding? Try our interactive lesson!
No exercises available for this concept.
Whenever you use the Finance App (TVM Solver) on your calculator, it's critical that you enter and interpret the signs correctly:
When you receive money from a bank or savings account, that value is positive, because you're gaining money.
When you send money to a bank, that value is negative, because you're losing money.
In IB, loans are paid off at the end of a number of periods (N) and have an annual interest rate (I%), an initial balance (PV), a fixed payment (PMT), and an outstanding balance (FV). Payments per year and compounds per year typically occur at the same frequency (P/Y, C/Y).
You can use the TVM solver with loans to find any of those variables if you know all the others.