THE SCENARIO
Let's say I
bought half of a note on terms, but after I got it, I wanted to sell it in such a way that my returns would increase.
Here's how I bought the note: 60 payments of $377.70
Here's what I got for that money: 94 payments of $450
My return on this investment will be 10%.
So let's say that after 34 months of receiving payments, I want to sell the note, and I want my overall return on my money to be 11.5%.
The question is: How much would I have to sell my half of the note for, in order to make my
total return 11.5%?
THE SOLUTION
This problem breaks down in two steps.
First, I need to find out what the value of my investment will be after I'm done making my paymen...
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