Posted by David Alexander on March 24, 2000 at 20:05:28:

Good Explanation… Thanks, that helped me understand it too.

David Alexander

Posted by Mark_TX on March 22, 2000 at 23:54:02:

Hello all,

If you read the my message from the other board, you know that I just acquired my 1st MH. Now, I need to create a note. About two weeks before I bought this MH I spent the money on the HP19BII. It has been very fun to punch numbers in…until tonight.

I have worked about 100 hours this week and feel a little “punchy”…so this may not make sense, but in my current state, it doesn’t make sense to me.

PMT = -200
I%/YR = 0%
N = 36
PV = 7,200

Okay, you say, that is right. So do I and I verified it by simply multiplying 200*36=7200. But, look at this…

PMT = -200
I%/YR = 12.75
N = 36
PV = What the heck is this…??? 5957.05???

I totally don’t get it.

How does charging 12.75 decrease the value of the note by ~1250 ??? Or does it? No, this is not a test, I think I am missing something very fundimental here.

I would really appreciate it if anybody could set me straight. Possibly loosing 1250 that could be mine does not really appeal to me.

Also, could somebody explain to me the concept of having to have a negative number in one of the fields on this calculator?

Thanks!

Posted by Eduardo (OR) on March 24, 2000 at 19:16:07:

Hi Mark–
Re. your last question (“concept of having to have a negative number”): Hewlett-Packard calculators (including the 19BII), unlike some other brands, observe cash flow sign conventions. What this means is , when entering numbers into the registers, money received is a positive number and money paid out is a negative number. Basically, for example, when working with present value, payment, and future cash flows, two of the three values must be entered as either positive or negative with the other value entered as the opposite. When working with only two of these three (PV,PMT,FV), one has to be entered as a positive number and the other as a negative number Ask yourself, is the money coming to me or going away from me. --Eduardo

You discounted it. - Posted by John Behle

Posted by John Behle on March 23, 2000 at 18:40:41:

In your -0-% calculations as David mentioned everything goes towards principle. If you wanted to discount the note to 12.75% - then you did the right calculation. If you want to CHARGE 12.75%, then the whole premise is off.

Then you would have to choose a higher payment or longer time period. 36 payments of 200 equals 7200. To add interest, you would have a higher total.

So, to sell it to someone and charge \$7200 as price and 12.75% as interest, you can have a longer time period or higher payment.

The time period would be 45.61 months (47 with a less than 200 final payment)

Or…

The payment over a 36 month time period would be \$241.73. The difference of 41.73 per month times 36 months equals \$1502.29 in interest. So they wouldn’t pay a total of \$7200 - they would pay \$8902.29 including interest.

Posted by David Alexander on March 23, 2000 at 01:49:41:

Because when you add the interest rate it gives you a present value of the \$5957.05

You will still recieve a total of \$7200 over the life of the loan, but part of that is interest and part of that is principal, when you put the interest into the calc it divides the two up. Without you putting an interest rate everything goes to principal.

I would suggest when selling a maybe home instead of selling on your perception of value sell on theirs.
What I mean is you’ve started off right by punching number before you go to sell.

But finish them of like this.

200 for 36 months will get you approx 6k
225 for 36 months will get you approx 6700
250 for 36 months will get you approx 7500

200 for 48 months will get you approx 7500
225 for 48 months will get you approx 8400
250 for 48 months will get you approx 9300

Now you know this going in to negotiate the sell. So you ask questions find out their downpayment and then you say something like my notes usually run around 4-5 years is that something you could live with?

Let them answer, and find out what kind of payment they are looking for? the may say it cant be over 225 a month with all my other bills.

You take the payment number, months do some quick figuring, add the downpayment and then you’ll arrive at your sell price.

And you may say something like If I could sell this mobile home to you for for XXXX with the payments you want and XXX months would that work for you.

And Bam, you’ll have sold at the top price.

Incidentally, my notes run 60-84 months, and I never sell under 10k, this housing we are talking about (Learned that from David Segars)

You can barely buy a good car under 10k.

David Alexander