USER’S GUIDE — 49Purchase Price of a Note —Fully AmortizedThe mortgage you are thinking about buying has the following termsand conditions: 15 years remaining, $100 per month incoming pay-ments, and you want a 25% yield or return on your investment. Inthis case you are paying for the income stream — the incoming pay-ments — and not the future value.STEPS KEYSTROKES DISPLAYClear calculator o o 0.00Enter desired yield 2 5 ˆ 25.00Enter term 1 5 T 15.00Enter payment amount 1 0 0 p 100.00Find purchase price l “run” 4,682.68— DO NOT CLEAR CALCULATOR —What if you want a 20% yield? Leave all of the above data and re-enter the 20% interest over the old rate, then re-calculate the loanamount.STEPS KEYSTROKES DISPLAYEnter your new desiredrate of return 2 0 ˆ 20.00Find purchase price l “run” 5,693.80Finding the Yield on a Discounted NoteAn individual wants to sell you a note under the following terms: 60months remaining in the term, a face amount when due of $7,500,10% interest-only payments of $62.50 (incoming). He says he willsell this note to you for $6,500 if you buy today. If you buy it, whatwill be the yield on your investment?STEPS KEYSTROKES DISPLAYClear calculator o o 0.00Enter future value ofnote when due 7 5 0 0 s l 7,500.00Enter purchase price 6 5 0 0 l 6,500.00Enter remaining term* 6 0 s b T 60.00Enter payment amount 6 2 • 5 0 p 62.50Find your yield ˆ “run” 13.70*Note: Pressing s bidentifies your entry as a periodic value.(Cont’d)
