Help With yeild please? - Posted by PBoone

Real Estate Investing
1

Posted by Marvin Seawood on December 29, 1998 at 23:18:50:

Pat,

With HP-10B, try PV=(Negative(cash flow)) 5000
to arrive at Bud’s solution. Marvin

2

Help With yeild please? - Posted by PBoone

Posted by PBoone on December 27, 1998 at 19:42:19:

I am at a loss with figuring yeild on these notes. I am using a HP10B. Could someone please show me the steps?

Notes - 1st and 2nd Position no other leins on property
1st note - $5000.00 Payable @ 10% IO w/ pmt of $40.13 per mo
Balloon of $5000.00 in five years
2nd note - $3500.00 zero interest, zero payments balloon
of $3500.00 in 5 years
Seller wants $5000.00 cash today for both notes
Thanks
Patrick

3

Thank you, Now maybe I can spell yield! - Posted by PBoone

Posted by PBoone on December 28, 1998 at 08:53:00:

Thank you both for the insight and solutions, Now I will take out the dictionary for spelling.
Pat

4

Re: Help With yield please? - Posted by Christopher C. Reed

Posted by Christopher C. Reed on December 27, 1998 at 21:01:13:

1st note - $5000.00 Payable @ 10% IO w/ pmt of $40.13 five year balloon.

You could set it up so:
N = Number of remaining payments = 60
I = Yield you want, say 18%.
PMT = 40.13
FV = 5000 (Balloon)
Solve for the Present Value
PV = -3,626.81

That’s how much you would pay for the 1st note to yield 18%.

2nd note - $3500.00 zero interest, zero payments five year balloon.
N = Number of remaining payments (periods) - 60
(Think of it as 60 payments of zero dollars i.e. nothing for five years.)
I = Yield you want = 18%.
PMT = 0
FV = 3500 (Balloon)
Solve for the Present Value
PV = -1,432.54

That’s how much you would pay for the 2nd note to yield 18%.

Hope this helps.

–CCR

5

Re: Help With yeild please? - Posted by Bud Branstetter

Posted by Bud Branstetter on December 27, 1998 at 20:49:56:

PV=5000
FV=8500(5000+3500)
PMT=40.13
N=60
Solving for I =18.19%

6

Re: Help With yeild please? - Posted by PBoone

Posted by PBoone on December 29, 1998 at 08:15:52:

Bud,
Using the order placed on the board I get “No Solution” Are you using a HP?
Pat

7

Re: Help With yield please? - Posted by Christopher C. Reed

Posted by Christopher C. Reed on December 27, 1998 at 21:07:57:

Note: Don’t forget to put the minus sign in front of the PV when keying it in or it will not solve on the 10B.