Finding The Yield On A Discounted Note - Calculated Industries 3430 User Manual

Finding the Yield on a Discounted Note

An individual wants to sell you a note under the following terms: 60
months remaining in the term, a face amount when due of $7,500,
10% interest-only payments of $62.50 (incoming). He says he will
sell this note to you for $6,500 if you buy today. If you buy it, what
will be the yield on your investment?
STEPS
Clear calculator
Enter future value of
note when due
Enter purchase price
Enter remaining Term/mths* 6 0 s b T*
Enter Payment amount
Find your yield
*Note: Pressing s b identifies your entry as a periodic value. For desktop
model, press π T to perform this function.
What should you pay for this trust deed if you want an 18% yield on
your investment?
STEPS
Enter your desired yield
Find purchase price
KEYSTROKES
o o
7 5 0 0 s l
6 5 0 0 l
6 2 • 5 0 p
ˆ
— DO NOT CLEAR CALCULATOR —
KEYSTROKES
1 8 ˆ
l
DISPLAY
7,500.00
6,500.00
60.00
62.50
"run" 13.70
DISPLAY
18.00
"run" 5,530.99
U ' G — 47
SER S UIDE
0.00