Money Blog - How discounted is that note really? Part 5

Lastly, time for part 5. To recap, the scenario from Parts 1, 2, 3, and 4 is as follows:

THE SCENARIO

I came across a note for sale. The terms of the note are as follows:

Original balance: $6,000

Unpaid balance as of June 2: $4,560

Term: 5 years

Interest Rate: 0

Payments: $100 per month

If I buy it, make the purchase on June 2, and the first payment I'll receive will be the July payment.

Every February, the borrower pays off $1,000 in order to accelerate the note paydown.


QUESTION

The current owner of the note wants to sell me the note for15% off... Read more...