Tutorial 3: Calculating the Yield on a Discounted Loan
Enter the numbers above in the boxes below. Do not enter a number in the box next to “Compute”.
Now experiment with different values.
Example 3: You have been offered $50,000 for a mortgage you own. (The original balance was $100,000, there were originally 120 payments due and your interest rate is 10%.) The mortgage has 66 monthly payments still outstanding of $1,321.51 each.
What yield is the note buyer intending to get? Answer = 22.32% p.a.
