# How do you figure out this yield? - Posted by Roger Gallimore

Posted by John Behle on January 23, 2000 at 24:52:55:

You invest \$-3060 - enter this as PV
(it must be negative since that is your investment)

Your time period is 12 months - enter as N
Your payment saved (earned) is \$300 - enter as PMT
Your future value (balloon) is -0- - enter as FV

So, we have 4 of the 5 variables needed. Solve for %I and you get 31.12%

Investing the \$3060 now saves (earns) payments of \$300 per month for 12 months. Your return on that money then (IRR or yield) is 31.12%

How do you figure out this yield? - Posted by Roger Gallimore

Posted by Roger Gallimore on January 22, 2000 at 17:20:07:

In Lonnie Scruggs new article “How do you see Y2K Doom or Gloom” in the section about prepaying a years payments, one example he gives is this:

his monthly payment is \$300, or \$3600 a year

if he pays a years payments in advance at 15% discount he only pays \$3060

this is a savings of \$540

He says this is a yield of 31% . Can someone explain how to figure this out. I have a real estate calculator but I can’t seem to get to this number of 31%. Any help would be appreciated.

Roger Gallimore