smk
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the irr calc takes care of most of the exponents. the only thing you have to worry about is annualizing it. you should use (1+r)^12 to annualize from monthly, but if you just multiply r x 12 it is not too bad.
the problem with the way you were going about it is they were going to make mistakes. you need to consider where the interest payments were coming from and record the impact as well. you also can't simply add each monthly interest payment to get a total expense paid out. that kind of stuff was going to fall through the cracks. then you get an answer that tells you to do something you really shouldn't do.
if you show each change in cash flow and then sum them up for each month, you can see all of the steps. then you just subtract to show the differences and run an irr for a breakeven. this is less likely to cause errors and you can still see each step...
Steve Kanney, CFA
http://www.integratedfinancialny.com/index.html
Any comments made are designed to help you make your own decisions and do not consititute investment advice.
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Mon Feb 25, 2013 9:40 am |
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marionsawyer
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A mortgage, whatever form it takes, can often be one of the biggest expenses of a person's life. Secured loans are available for business premises and residential loans, and often involve repayments over many years.
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Thu Apr 11, 2013 10:13 am |
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elwinmerle
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As you get ready to purchase your first home, make sure you've made a housing budget and applied for a mortgage, so you'll know how much you can afford to spend.
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Thu Apr 18, 2013 5:49 am |
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