THE SCENARIO
I've been thinking recently of how to help investors get started when they have a month-to-month surplus but haven't yet accumulated a pile of cash to buy a property, business, or other investment. The simplest way to handle it, of course, would be to just borrow money from a new investor at a rate that would leave them with a reasonably-sized pile at the end.
To make sure the lender is protected, I'd probably secure the loan against a piece of real estate or something else of value.
If I were to borrow $900 per month from an investor for 10 years, at 8% yield, how much would I owe them at the end of the 10 years?
THE SOLUTION
This one is a pretty straightforward time-value-of-money (TVM) calculation.
First things first, make sure the calculator is using 12 Payments per Year....
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