Need help calculating Yield - Posted by Chuck - NJ

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by Chuck - NJ on July 09, 2001 at 12:32:40:

This is exactly what I was looking for, thank you. The light bulb has finally turned on.

Chuck - NJ

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Need help calculating Yield - Posted by Chuck - NJ

Posted by Chuck - NJ on July 08, 2001 at 20:03:55:

I need some help calculating my yield on a Mobile Home Loan(or any for that matter). I see Lonnie do this in all his books but I cannot figure out how he gets his final yield. I scoured both my calcualtor’s instructions and financial functions in Excel. Am I blind? I just don’t see any functions to figure this out.

Example: N=36 PMT=136.74 PV=2800 (loan interest rate is 9)

Lonnie’s Yield - 41.24 (How does he caculate that?)

Any and all explanations would be greatly appreciated.

Chuck

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Thank you for the help - Posted by Chuck - NJ

Posted by Chuck - NJ on July 09, 2001 at 12:50:06:

Just wanted to give everybody a “Thank you” for helping me out.

Thanks again,
Chuck - NJ

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Re: Need help calculating Yield - Posted by David (OH)

Posted by David (OH) on July 09, 2001 at 10:05:09:

The excel functions are a follows:

=PV()
=FV()
=PMT()
=NPER()
=RATE()

You will need to read the help files in excel to figure out what goes in the (). I might try it out real quick just for fun and I will share with you what I figure out.

David

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Financial Calculator - Posted by Ernest Tew

Posted by Ernest Tew on July 09, 2001 at 06:10:03:

Chuck:

I am sending you by e-mail an excerpt from my book. It consists of three pages of instructions on how to use a financial calculator. Although not complete, it will answer your question and give you the basics of how to use a financial calculator.

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Re: Need help calculating Yield - Posted by Bill

Posted by Bill on July 08, 2001 at 21:03:49:

Well in order to find a yield, you first have to know how much you have in the investment. Then you have to know how much you stand to make. The difference is your yield. It can be expressed as a percentage if you wish.

Investment in widgets. $100.00
sales costs to sell widgets 20.00
Total investment in widgets: $120.00
Sell the widgets for: 200.00

Profit: $ 80.00
Yield = 80% or if you want to you can divide it up over the period of time you held it. lets say 3 years, so it would be 26.66 % per year.

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Re: Need help calculating Yield - Posted by Karl (Oh)

Posted by Karl (Oh) on July 09, 2001 at 22:55:59:

To add a little to David’s info on Excel.

If you click on the Fx button on your standard toolbar, a list of function categories along with a description of each function will open. Select the financial category, and you get a list of financial functions. Click on the RATE function, and you’ll be prompted to fill in the numbers for NPer, PV, and PMT. If you type these numbers into a spreadsheet first, then insert the cell coordinate that has each number (A1, F3, whatever) into the function box, its easy to play with your spreadsheet to see how changes to the numbers effect your yield. For example, your buyer is a little light on his downpayment? No problem, increase his monthly payment a little to get you back to your target yield.

If your answer is greater than 12% or 13% per month, you’ll get a #NUM! Your yield on that Lonnie Deal broke the computer! This means that the author’s of Excel never dreamed that someone would be earning 14% return per month on an investment. To override, type in a guess rate, say 0.2, farther down the list in the function box, so Excel looks in the right range for an answer.

Karl Kleiner

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Re: Need help calculating Yield - Posted by Chuck - NJ

Posted by Chuck - NJ on July 09, 2001 at 10:33:36:

David,

Thanks for the info. I did try to use RATE() but it insists on asking for start and stop dates (not periods). Is there a way of using # of periods?

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Re: Financial Calculator - Posted by Art

Posted by Art on July 09, 2001 at 09:35:57:

hi can you please send me the instructions on how to use that calculator,thanks in advance

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Re: Need help calculating Yield - Posted by David (OH)

Posted by David (OH) on July 09, 2001 at 11:25:23:

Formula is =RATE(nper,pmt,pv,fv,Type)

Enter =RATE(36,-136.74,2800,0,0)

This will give you 3.44%, but this is a monthly rate since your NPER (or N) is in months. Multiply 3.44 by 12 and you get 41.24%. This is a yearly rate.

I have not seen the start and stop dates you refer to except in the depreciation calculations. Is it possible you were using a different function?