38 — Q
UALIFIER
P
LUS
®
4
X
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.
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
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter desired yield
2 5 ˆ
25.00
Enter Term in years
1 5 T
15.00
Enter Payment Amount
1 0 0 p
100.00
Find purchase price
l
“run” 4,896.97
— DO NOT CLEAR CALCULATOR —
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
KEYSTROKES
DISPLAY
Enter your new desired
rate of return
3 0 ˆ
30.00
Find purchase price
l
“run” 4,179.12