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Loadstar 15
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015.d81
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present value
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2022-08-26
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PRESENT VALUE OF AN ANNUITY
The PRESENT VALUE of an annuity is
the single amount which invested now
would have a compound amount the same
as the annuity at the end of the term.
At the time one borrows money, the
present value is exactly the amount of
the loan. At any time later, the
present value is the single amount
which pays the loan off.
PROBLEM: You borrow $10,000 at an
APR of 15% for 48 months. How much do
you still owe on the note just AFTER
the 24th payment?
SOLUTION: First use the LOADSTAR
AMORTIZATION PROGRAM on this disk to
determine that the monthly payment is
$278.31.
The payoff just after the 24th
payment is the present value of the
remaining 24 payments. Use option two
of the program to find that the payoff
is $5739.93.
The amount $5739.93 is the amount on
the day that the 24th payment was made
and after the 24th payment was made.
It is NOT the amount of the payoff on
the day that the 25th payment is due.
If you wait say 15 days after the
24th payment, then to pay the loan
off, the amount of the payoff would be
$5739.93 plus 15 days interest on
$5739.93.
If you want to run the LOADSTAR
\oad"amortization",8
AMORTIZATION PROGRAM now, press "\".
Al Vekovius
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