Trust Deeds & 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 [Int] key, and (2)
when entering or solving for “purchase price” or “present value,”
use the [L/A] key.
Purchase Price of a Note — Fully Amortized
The mortgage you are thinking about buying has the follow-
ing terms and conditions: 15 years remaining, $100 per month
incoming payments, and you want a 25% yield or return on
your investment. In this case you are paying for the income
stream — the incoming payments — and not the future value.
Steps
Keystrokes
Display
Turn calc. off then on
[Off] [On/C]
0.00
Enter desired yield
25 [Int]
25.00
Enter term
15 [Term]
15.00
Enter payment amount
100 [Pmt]
100.00
Find purchase price
[L/A]
“run” 4,682.68
— D O N O T C L E A R C A L C U L A T O R —
What if you wanted a 20% yield? Leave all of the above data
the same and re-enter the 20% interest right over the old rate
and then re-calculate the loan amount.
Steps
Keystrokes
Display
Enter your new desired
rate of return
20 [Int]
20.00
Find purchase price
[L/A]
“run” 5,693.80
29 – User’s Guide
