# Yield on balloon splits question for Morrongiello - Posted by Jerry

Posted by Michael Morrongiello on April 27, 2002 at 17:56:01:

Jerry;

…N…I…PV…PMT…FV
360/60 9.5% \$125,000.00 \$1,051.07 \$120,301.22

60 14.97% \$80,000.00 \$1,051.07 \$75,301.22

The first line represents the \$125,000.00 actual Note repayment terms.

If the property seller / Note seller is going to receive \$80,000.00 cash at closing then an additonal \$45,000.00 as his/her share of the \$120,301.22 balloon payment due in 60 months, then there will be REMAINING \$75,301.22 that will be left to collect for the “paper” investor of the overall balloon payment.

This results in a YTM Yield to maturity of 14.97% on the “paper” investors initial \$80,000.00 cash investment over the 60 months providing all payments are collected as agreed.

Michael Morrongiello

Yield on balloon splits question for Morrongiello - Posted by Jerry

Posted by Jerry on April 27, 2002 at 09:13:27:

On your earlier post answer you mention a balloon split. Sale of house \$128,000. Give note for 125,000, 9.5%,360 mos, \$1051.07 pmnt. with 60 mo balloon. You would pay 80,000 now and 45,000 in 60 mo. Would you tell me how to calculate the yeild for the investor on this senario?