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THE SCENARIO
A friend of mine recently told me she wants to sell a couple of notes that she owns, and that she won't take a discount (which means that she wants to be paid exactly what the unpaid balance of the notes are today in order to hand over the note).
One of the notes has original terms that are as follows: 10 year duration, fully amortizing, 12% interest, monthly payments, $100,000 original balance.
The question: The note originated 21 months ago. How much would it cost me to buy it?
THE SOLUTION
This one has two parts*, both of which are straightforward.
- Determine the monthly ... Read more...
