Tutorial: 1 | Tutorial: 2 | Tutorial: 3 | Tutorial: 4 | Tutorial: 5 | Tutorial: 6

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.