Calculator Problem – 06/15/2015

You have a choice between two $500,000 loans.  The first loan is fixed for 10 years @ 5.25% and amortized over 25 years.  The second loan is fixed for 15 years at 5.5% and amortized over 25 years.  If you took the 5.25% loan and invested the difference between the two payments at 12% then at the end of ten years started taking a monthly draw down of the investment that is still returning 12% to add to your current payment, what interest rate could you then support to end up at an equivalent point at the end of the 15 year loan?

Join us on Facebook as Bruce shows us how to solve this one.  😉  Good morning Bruce!

(The answer will be posted with the new calculator problem in 2 weeks. Or if you can’t wait that long, you can go to https://www.facebook.com/garyjohnstonseminars for the answer.)

Answer for 06/01/2015:

(N=300,I=5,PV=500,500,FV=0) PMT= -2925.87

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