Calculated Industries 3430 - Finding the Yield on a Discounted Note

U
SER’S GUIDE — 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