U
SER
’
S
G
UIDE
— 47
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
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter future value of
note when due
7 5 0 0 s l
7,500.00
Enter purchase price
6 5 0 0 l
6,500.00
Enter remaining Term/mths*
6 0 s b T
*
60.00
Enter Payment amount
6 2 • 5 0 p
62.50
Find your yield
ˆ
“run” 13.70
*Note: Pressing
s b
identifies your entry as a periodic value. For desktop
model, press
π T
to perform this function.
— DO NOT CLEAR CALCULATOR —
What should you pay for this trust deed if you want an 18% yield on
your investment?
STEPS
KEYSTROKES
DISPLAY
Enter your desired yield
1 8 ˆ
18.00
Find purchase price
l
“run” 5,530.99
