Posted by Michael Morrongiello on April 27, 2002 at 17:56:01:
Jerry;
…N…I…PV…PMT…FV
360/60 9.5% $125,000.00 $1,051.07 $120,301.22
60 14.97% $80,000.00 $1,051.07 $75,301.22
The first line represents the $125,000.00 actual Note repayment terms.
If the property seller / Note seller is going to receive $80,000.00 cash at closing then an additonal $45,000.00 as his/her share of the $120,301.22 balloon payment due in 60 months, then there will be REMAINING $75,301.22 that will be left to collect for the “paper” investor of the overall balloon payment.
This results in a YTM Yield to maturity of 14.97% on the “paper” investors initial $80,000.00 cash investment over the 60 months providing all payments are collected as agreed.
To your success,
Michael Morrongiello