You find someone that will sell their house for $100,000. She wants $30,000 at closing and will carry the balance amortized for thirty years at 5%. You create two notes: one for $70,000 for her to keep and another one to sell. You find a note buyer that is happy with an 8% return and will buy the note at closing. If both notes have the same terms, what will the face amount of the second note need to be?
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Answer for 04/21/2014 problem:
(N=48,PV= -11,250,PMT=345,FV=0) I=20.44%