Calculator

Question 1

Decimals

Answer 1

Gold+disp+4

Question 2

Payments per year

Answer 2

1+gold+p/yr

Question 3

Beg/End

Answer 3

Gold+beg
Nothing is end

Question 4

N,I, PV,PMT, FV

Answer 4

Number of periods-never negative
Interest-99.5% positive
Present value-most of the time negative or zero
Payment
Future value-never negative and could be zero

Question 5

PV positive

Answer 5

Amortization ie loans

Question 6

Number of period+gold+N

Answer 6

All the time except solving for N

Question 7

Three step tmv problems

Answer 7

Retirement income and college education

Question 8

Step 1 of TMV for retirement/education-inflating required amount needed for retirement or education

Answer 8

PV-amount needed in todays dollars
Fv-solve for
N-how many years until needed
I-inflation

Question 9

Step 2 of TMV for retirement/education-lump sum needed

Answer 9

PV-solve for
FV-0
PMT-from answer 1 or FV
N-number of years money is needed
I-real rate

Question 10

Step 3 of TMV for retirement/education calculation for required funding

Answer 10

PV-0
FV-amount calculated in step 2 or provided
N-amount of periods times savings frequency
I-investment rate

Question 11

Yield to call

Answer 11

Amount of yield calculated, only if asking for this information
This will be par plus call premium
Use call years, not to maturity years

Question 12

Yield to maturity

Answer 12

Total amount earned on a bond

Question 13

Bond intrinsic value

Answer 13

Comparing to another bond
For our bond-Figure out coupon
For their bond-interest rate

Question 14

Tmv-bond

Answer 14

PV-solve for
FV-par/face value
Payments-interest*par value/payments per
N-number of payment periods
I-coupon rate

Question 15

Payment periods

Answer 15

RTFQ! Always check for payment periods

Question 16

IRR or total return

Answer 16

Gain or loss, cash flow, holding period
No payments, solve for i/yr

Question 17

Calculator essentials

Answer 17

RTFQ!
Clear/reset payment period to 1!
Slow down!
Payment period!

Question 18

Uneven cash flow or cash flow entry method

Answer 18

Enter 1 for N
CFj
Additional money CFj
IRR-gold, IRR (CST)

Question 19

CFj or cash flow

Answer 19

All about money coming in and out, not a debt note

Question 20

The final year cash flow

Answer 20

1.Sale of proceeds
2.The return of the mortgage(no down payment as that was part of the cash flow)
3.The net operation cash flow

Question 21

Amortization

Answer 21

1-input
Payments+gold+fv

Question 22

Mortgage trick for after tax

Answer 22

Early interest-12*payment (round down) times by tax bracket
Subtract by payment

If asking for the 10th year find interest for both 9th and 10th subtract times by tax bracket
Subtract payment

Question 23

Qualified residence interest

Answer 23

Deductible mortgage interest
Loan not to exceed $750k married/$375k mfs
Existing at $1 million are grandfathered
Home loan to better house okay
Home loan not to better not grandfathered

Question 24

Refinancing

Answer 24

How long will they be in the home and cash flow capacity

Obtain lower interest rate
Consolidate debt
Change term of the loan
Raise extra cash

Question 25

Reverse mortgage general rules

Answer 25

-Only available for 62 and up owning condo or single family home
-No income qualifications
-retain title, the borrower lives and owns home
-no mortgage payments
-proceeds are tax free
-payments vary on age, valuation, interest rates, and type of reverse mortgage selected
-a reverse mortgage isn’t paid until they move out
-the repayment amount cannot exceed the value of the home, regardless of the loan balance
-once the loan is repaid, excess is returned to the borrower
-the home does not need to be owned free and clear to qualify for a reverse mortgage

Question 26

Balloon mortgage

Answer 26

A balloon mortgage is a type of home loan where the borrower makes low or no monthly payments for the first part of the loan term, and then makes a large final payment to pay off the remaining balance