Other Stuff Flashcards
(39 cards)
How to shift compounding in rates:
P/yr, #nom%, give EFF%, new#p/yr, give EFF%
How to get principle/interest/balance for loan
Enter loan info, if rounding payment, enter new payment. Then press #(n) INPUT, down, AMORT, =,=,=
How to calculate principle/interest for year 2:
13 INPUT 24 down AMORT, = (P paid), = (I paid)
Simple interest calculation for months given % per annum
% / 12 x months x investment
What is j and how does it relate to i?
j = nominal interest rate (no compounding)
i = interest per period (periodic)
i x periods/year = j
Convert z% compounded quarterly to periodic daily rate
Convert from quarterly to 365 then divide by 365
How do you calculate interest adjustments for early advances on loans?
Convert interest rate to daily then run calc on loan amount for the required number of days
When calculating payment advanced days what is day 1?
The day the funds are given
How is semi-annual periodic interest rate denoted?
i(sa)
What is the difference between nominal and effective rate?
Nominal at stated compounding, effective is always annual compounding.
What is the difference between annuity due and ordinary annuity?
Annuity due = pmts at beginning
Ordinary = pmts at end
What is the difference between a simple annuity and a general annuity?
Simple = interest same as compounding
General = interest different than compounding
How do you calculate a perpetual annuity?
N = 999
When discounting to the beginning of an ordinary annuity at the end of year 5, how many years are there?
4
What are the variables in:
FV = PMT x s[[n, j(m)]]
FV = future value
PMT = payment
s[[n, j(m)] = “S-N-J” future value of $1 per period at…
n = periods
j = nominal rate
m = compounding frequency
What do FAL and PAL stand for?
Fully amortized loan/partially amortized loan
How do you calculate balances with accelerated biweekly payments?
Calculate monthly payment, half and enter it, convert interest to biweekly, recalculate N, then amort schedule.
Why might a vendor offer below market financing instead of selling the property for a lower price?
Not wanting to devalue entire development for one property, expected decrease in interest rates and wanting to get those buyers now.
What creates a bonus in the secondary mortgage market?
When the interest rate is lower than the contract rate
What creates a discount in the secondary mortgage market?
When interest rates are higher than the contract rate
How to calculate market value of a mortgage?
Calculate payment, re-enter to get amort period, use amort period/payment or future value at market to get PV at market
Net vs. Gross mortgage amount
Net is funds advanced after fees. Gross is face value (amount to be paid back).
If the net loan is higher than the gross loan, will the COFA be higher or lower than the contract rate?
Lower
If the net loan amount is lower than the gross loan amount, will the COFA be higher or lower than the contract rate?
Higher
