401(k)/403(b) 5 Year Loan Repayment
Contents
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:
Prompt |
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 |
|
Payments Made At |
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.