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Trust Deeds and Discounted Notes
Your calculator easily handles trust deed purchase price and yield
problems. Two things to remember are:
1) when entering or solving for "yield" or "rate of return," use
the ˆ key, and
2) when entering or solving for "purchase price" or "present
value," use the l key.
Purchase Price of a Note — Fully Amortized
The mortgage you are thinking about buying has the following terms
and conditions: 15 years remaining, $100 per month incoming pay-
ments, and you want a 25% yield or return on your investment. In
this case you are paying for the income stream — the incoming pay-
ments — and not the future value. What price should you pay, based
on this desired yield?
STEPS
Clear calculator
Enter desired Yield
Enter Term
Enter Payment Amount
Find purchase Price
What if you want a 30% yield? Leave all of the above data and re-
enter the 30% interest over the old rate, then re-calculate the loan
amount.
STEPS
Enter your new desired
Rate of Return
Find purchase Price
42 — Q
UALIFIER
KEYSTROKES
o o
2 5 ˆ
1 5 T
1 0 0 p
l
— DO NOT CLEAR CALCULATOR —
KEYSTROKES
3 0 ˆ
l
P
III
®
LUS
X
DISPLAY
0.00
25.00
15.00
100.00
"run" 4,896.97
DISPLAY
30.00
"run" 4,179.12
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