Join our investing community

Help-explaination needed on article

Discussion in 'Real Estate' started by snowflake, 3rd Jul, 2006.

  1. snowflake

    snowflake New Member

    Joined:
    21st Jun, 2006
    Posts:
    2
    Location:
    Melbourne
    Short time member- first time poster..

    Can someone please explain how the equation for "interest payments" of $14718 was calculated on the "living off equity" article on page 7.....Sorry but this is the one piece of the equation that I am missing for making my own spreadsheet....Sorry ....I feel a bit dumb asking.
     
  2. Punter

    Punter Punter

    Joined:
    29th Jun, 2006
    Posts:
    23
    Location:
    Perth
    Hi there!

    I am also new here and am trying to understand the artical down to every word.

    Here is a backward calculation. If my interpretation is correct then two conclusions.. I am getting hang of the artical and I am good at maths :)

    So here it is

    20,000 over four years = 80,000 over one year
    21,000 over three years = 63,000 over one year
    22,050 over two years = 44,100 over one year
    23,152.5 over one year = 23,152.5 over one year

    Thus total capital of 210,252.5 over one year at 7% = 14,718

    Would like to see your worksheet if possible.


    Punter
    -----------
    Sucessful people don't do different things, they do things differently.