50 — M
ORTGAGE
Q
UALIFIER
P
LUS
®
P
X2
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, and (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.
STEPS
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter desired yield
2 5 ˆ
25.00
Enter term
1 5 T
15.00
Enter payment amount
1 0 0 p
100.00
Find purchase price
l
“run” 4,682.68
— DO NOT CLEAR CALCULATOR —
What if you want a 20% yield? Leave all of the above data and re-
enter the 20% interest over the old rate, then re-calculate the loan
amount.
STEPS
KEYSTROKES
DISPLAY
Enter your new desired
rate of return
2 0 ˆ
20.00
Find purchase price
l
“run” 5,693.80
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
6 0 π T
60.00
Enter payment amount
6 2 • 5 0 p
62.50
Find your yield
ˆ
“run” 13.70
— DO NOT CLEAR CALCULATOR —
