﻿ 401(k)/TSA 5 Year Loan Repayment

401(k)/403(b) 5 Year Loan Repayment

# Example #1

A client wants to borrow \$10,000 from their retirement account. The loan rate is 5% and must be paid off in five years. What are the quarterly payments?

Data Entry

## Step 1: Solve the current term.

Use the following values for the prompts:

## Value

Calculation Type

Loan

Calculate

Payment Amount

Loan Value

\$10,000

Interest Rate

5%

Number of Years

5

Type of Payment

Level Payments

Payments per Year

4

End of Period

Balloon Payment

\$0

## Result

The quarterly payments would be \$566.92.

# Example #2

In the same example, what would the monthly payments be?

Data Entry

Change the Payments per Year from 4 to 12.

## Result

The amount of each payment would be \$188.21.

# Example #3

What would the monthly payments start at if the payments increased by 3% per year?

## Data Entry

Change Type of Payment from Level Payments to Annual Increase by Percent. Then enter 3% for the Annual Increase in Payment.

## Results

The monthly payments start at \$181.17.