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 (incom-
ing). 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
[On/C] [On/C]
0.00
Enter future value of
note when due
7,500 [FV]
7,500.00
Enter purchase price
6,500 [L/A]
6,500.00
Enter remaining term
5 [Term]
5.00
Enter payment amount
62.50 [Pmt]
62.50
Find your yield
[Int]
“run” 13.70
— D O N O T C L E A R C A L C U L A T O R —
What should you pay for this trust deed if you desired an 18%
yield on your investment?
Steps
Keystrokes
Display
Enter your desired yield
18 [Int]
18.00
Find purchase price
[L/A]
“run” 5,530.99
30 – Qualifier Plus
®
IIx DT
