hassle-free cashflow minute lesson 6: math behind interest rate
Post on 28-Nov-2014
1.011 Views
Preview:
DESCRIPTION
TRANSCRIPT
Hassle-free Cashflow Minute
Investor Educational Series by Professional Investor / Developer
David Campbell
www.HassleFreeCashFlowInvesting.com©2011 All Rights Reserved
Lesson 6: Math Behind Interest Rate
www.HassleFreeCashFlowInvesting.com
Interest = rate x capitalRate = interest / capitalCapital = interest / rate
www.HassleFreeCashFlowInvesting.com
Case Study: Interest = rate x capital
$100 = 10% x $1,000
www.HassleFreeCashFlowInvesting.com
Case Study: Rate = interest / capital
10% = $100 / $1,000
www.HassleFreeCashFlowInvesting.com
Case Study: Capital = interest / rate
$1,000 = $100 / 10%
www.HassleFreeCashFlowInvesting.com
CALCULATING PRORATED INTEREST
www.HassleFreeCashFlowInvesting.com
daily interest rate = annual rate / # of days per year
borrowers like to prorate using 365 days 10% annual interest /365 days = 0.0274% per day
lenders like to prorate using 360 days10% annual interest /365 days = 0.0278% per day
www.HassleFreeCashFlowInvesting.com
CALCULATING PRORATED INTEREST
daily interest rate x number of days
x principal prorated interest
0.0277% per dayx 108 daysx $100,000
$2,991.60 prorated interest
david@HassleFreeCashFlowInvesting.com
David Campbellover $800 million of real estate
transaction / advisory experience
sign up for my FREE real estate investor education newsletterwww.HassleFreeCashFlowInvesting.com
top related