Hi. This is kenny from in-a-day development welcome to our video tutorial on pv or present value PV represents the amount of money something is worth right now for this example I'm going to assume that I'm buying a mortgage note or other payment stream that has 41 more monthly payments owed on it because these are monthly payments I make sure that pyr is 12 you can see your pyr setting in the bottom of your calculators display 41 monthly payments means that I have to put 40 1 into n I want to make eighteen percent return on my money.
I put 18 into I yr keep in mind that this does not mean that the person paying on the note is paying eighteen percent interest the terms of the note do not change their interest rate doesn't change their payment doesn't change nothing changes but I'm going to be buying the note at less than face value.
Knowing what return I want to make on my money will help me determine how much I'm willing to pay for it the monthly payments are for five hundred dollars per month.
I put 500 into PMT since. This is money i receive i put in a positive number at the end of the 41 payments the person paying on the note has a twenty-thousand-dollar balloon payment I put 20,000 into FV since. This is also money i receive this number is also positive then i hit pv to see how much i'd pay for this note if i want to make eighteen percent return on my investment i get negative 2690 179 meaning that if i want to earn eighteen percent on my money I can pay a maximum of twenty six thousand dollars 90 179 for the note thanks for watching and make sure you get your timbi to financial calculator app from the App Store for iPhone iPad Android and Mac OS if you have any questions about this example please feel free to email us at the team at anna de développement calm.