You purchase a property for $350,000. The seller wants $50,000 down and payments of $5000 a month at 4%. How long will it take you to pay off the property?
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Answer for 12/29/2014
(N=120,PV= -20,000,PMT=500,FV=0) I=28.14%
You are paying on a note that has a balance of $60,000 with 0% interest and $500 a month payments. If you could buy the note for $20,000, what would be the return on your investment (monthly compounding)?
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Answer for 12/15/20
(N=36,PV= -65,000,PMT=0,FV=140,000) I=25.85%
You sell a property for $140,000 that you purchased for $65,000 for cash three years earlier. What was the return (monthly compounding) on your invested capital?
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Answer for 12/01/2014 problem:
(N=120,I=8,PV= -500,000,PMT=0) FV= $1,109,820.12
(N=120,I=4.5,PV= -500,000,PMT=0) FV=$ 783,496.39
$ 326,323.73
What is the difference over 10 years of investing an IRA with a beginning balance of $500,000 at 8% instead of 4.5% (compounded monthly)?
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Answer for 11/17/2014 problem:
(N=360,I=18,PV= -649,PMT=0) FV=$138,044.75
A new iPhone costs $649. If you kept your old phone and invested the $649 at 18%, how much would you have at the end of the 30 years?
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Answer for 11/03/2014 problem:
(N=60,I=10,PMT= -276.97,FV=0) PV= $13,035.70
A tractor company is offering $0 down and 0% financing for 60 months. If the tractor costs, $16,618 and your cost of capital is 10%, what is the equivalent cash price today?
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Answer for 10/20/2014 problem:
(N=360,I=4,PV=100,000,FV=0) PMT=$477.42
(N=360,I=5,PV=100,000,FV=0) PMT=$536.82
$ increase $ 59.40
% increase = $59.40 / $477.42 = 12.44%
If you have a $100,000 loan amortized over thirty years, what percent does the payment increase if interest rates go from 4% to 5%?
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Answer for 10/06/2014 problem:
(N=360,I=12,PV=25,500,PMT=0) FV=$916,715.85
You sell a property for $140,000 that you purchased for $65,000. You choose to 1031 exchange the proceeds instead of paying capital gain taxes today at the rate of 34%. If you invested the money you would have paid in taxes for 30 years at 12%, how much money would you have?
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Answer for 09/22/2014 problem:
(I=15,PV=0,PMT= -100,FV=100,000) N= 209.51
How long would it take you to create a $100,000 nest egg, if you invest $100 a month at 15%?
(Internalize the difference between this answer and the 09/08/2014 problem.)
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Answer for 09/08/2014 problem:
(I=12,PV=0,PMT= -100,FV=100,000) N=240.99 months
How long would it take you to create a $100,000 nest egg, if you invest $100 a month at 12%?
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Answer for 08/25/2014 problem:
(N=588,I=15,PV=960,PMT=0)FV=$1,427,414.10
