All Forum Posts by: Kathryn Bangs

Thanks everyone for your comments on this question I posted a while back. 

It was not a typo. 43 days was the time to maturity. 

I did calculate it as good:) however, was looking to understand the calculation for my actual rate of return at payoff. The numbers are really pretty simple but I’m still not clear what my actual rate is:) I’m a detail and process person so am always looking for ways I can quickly figure out where I am when analyzing an opportunity.

Here are the deets again if anyone wants to take a look;

Note purchased $40k

Face value of note $43k

Note interest rate 7% to 1/19/18, 12% after that date. (typo above said 8)

No payments

Projected payoff date is 2/28/19, 

Payoff amount with interest $43,806.

$3,806/$40,000=9.5%? Is this my rate of return?

. 

How do I calculate my real rate of return if I buy a $43k deed of trust for $40k that pays interest of 8% and matures in 43 days?

I know calculation for annual rate of return but, my $ are invested shorter term and I’m not sure how to throw that in the mix to figure out what return really is.

Thanks for any insight.