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Learn how to use the note calculator with these examples |
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| Whole purchase, no balloon. Original
principal balance of $100,000 amortized over 30 years, no balloon,
interest rate 10% per annum. What are the monthly payments? |
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| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 100000 | 10 | 877.57 | 360 |
| What is the current balance if 90 payments have already been made? (Note you only change the # of payments from 360 to 90. The current balance is the Future Value) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -94105.39 | 100000 | 10 | 877.57 | 90 |
| What is the present value of the payments that are remaining? (You will see this is almost exactly the same as the current balance just calculated, as you would expect.) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 94105.01 | 10 | 877.57 | 270 (360-190) |
| If you want to buy the remaining 270 payments to give you a yield of 15%, how much would you pay? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 67752.51 | 15 | 877.57 | 270 |
| If you can resell the remaining 270 payments to an investor who wants a yield of 13%, how much would they pay? (Your profit is $76,590.35-67,752.51 = $8,837.84 excluding your costs like the appraisal) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 76590.35 | 13 | 877.57 | 270 |
| Whole purchase, with balloon. Same scenario as above (Original principal balance of $100,000 amortized over 30 years, interest rate 10% per annum, payment 877.57 per month) but with a balloon in 10 years. First you need to know the amount of the balloon. | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 is the balloon | 100000 | 10 | 877.57 | 120 (=10 years) |
| What is the current balance if 90 payments have already been made? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -94105.39 | 100000 | 10 | 877.57 | 90 |
| What is the present value (after 90 payments have been made) of the remaining 30 payments and the balloon? (it is the same as the current balance just calculated) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 (the balloon) | 94105.39 | 10 | 877.57 | 30 (120-90) |
| If you want to buy the remaining 30 payments and the balloon to give you a yield of 15%, how much would you pay? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 (the balloon) | 84488.15 is what you pay | 15 | 877.57 | 30 |
| If you can resell the remaining 30 payments and the balloon to an investor who wants a yield of 13%, how much would they pay? (your profit is 88,195.07-84,488.15 = $3,706.92 minus your costs) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 (the balloon) | 88195.07 is what they pay | 13 | 877.57 | 30 |
| How about if you buy the remaining 30 payments and not the balloon? What is the present value of those 30 payments? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 23209.13 | 10 | 877.57 | 30 |
| If you want to buy the remaining 30 payments to give you a yield of 15%, how much would you pay? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 21841.76 | 15 | 877.57 | 30 |
| If you can resell the remaining 30 payments WITHOUT the balloon to an investor who wants a yield of 13%, how much would they pay? (your profit is $22,374.69-21,841.76 = $532.93 minus your costs) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 22374.69 | 13 | 877.57 | 30 |
| How about if you buy the balloon and NOT the remaining 30 payments? What is the present value of that balloon? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 | 70896.25 | 10 | 0 (you aren't getting them) | 30 |
| If you want to buy the balloon only to give you a yield of 15%, how much would you pay? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 | 62646.39 | 15 | 0 | 30 |
| If you can resell the balloon only to an investor who wants a yield of 13%, how much would they pay? (your profit is $65,820.38-62,646.39 = $3,173.99 minus your costs) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -90938.34 | 65820.38 | 13 | 0 | 30 |
| Partial purchase no balloon. Same scenario as above (Original principal balance of $100,000 amortized over 30 years, interest rate 10% per annum, payment 877.57 per month, no balloon ). What is the current balance if 90 payments have been made? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| -94105.39 | 100000 | 10 | 877.57 | 90 |
| What is the present value of the remaining 270 payments? (You should get almost the identical answer to the last question). | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 94105.01 | 10 | 877.57 | 270 (360-190) |
| If you want to buy the next 135 of the remaining 270 payments to give you a yield of 15%, how much would you pay? | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 57082.32 | 15 | 877.57 | 135 |
| If you can resell these 135 payments to an investor who wants a yield of 13%, how much would they pay? (your profit is $62,092.62-57,082.32 = $5,010.30 minus your costs) | ||||
| Future Value | Present Value | Interest Rate (per year) | Payment per period | Total # of payments |
| 0 | 62092.62 | 13 | 877.57 | 235 |
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Table courtesy of: mortgage-investments.com |
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