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“Youtube. I m a girl is here and we re going to talk about compensation compensation balance in a loan and how to make a calculator for our compensation balance an excel spreadsheet now their compensation balance is when the bank does not believe that you re going to be able to pay all your payments for what the thing that they re letting money or maybe. Because you re asking for a better rate and the bank. That s not feel comfortable with it so they are asking for compensation.
Balance just freaking. Crooks but well. Okay now okay since you need. 100000 for your.
Business since you are asking for 100000. Because that s the money you ve got yet you re gonna i need you onion. Know that the bank is taking away from you by museum of the money you re asking from them. So.
What you need to do is to take the money you need i m divided by one minus five to them xena. So. What you re finally asking for is one hundred and five thousand dollars two hundred and sixty three dollars or sixteen. Cents and that is to get 100000.
So let s make the let s make up the numbers. So yes we ll prep. One hundred and five thousand dollars and you re taking away from you five percent of it you finally getting 100000. Great.
Let s just think for a moment. Let s just pretend they re keeping you 2 compartment modeling. Which is varying the period of time of one year you re paying every month at the end. This is this is the mechanics are nominal rate.
Which is 12 compounded monthly..
But since there is no way in mathematical finance math. To make an amortization table with a nominal rate. You re gonna have to turn into an effective weight. So you take this and divide by 12 and you get one brilliant effective monthly rate and effective monthly.
Just change this time you go okay. So let s start to make this. Mark sation table. Cash flow.
And this is what this is why and this is because we need to know what the final rate of the of of the bank is going to be so your initial bounce. He s one hundred and five thousand two hundred and sixty three in the year. But the bunch the champagne i just named that our digital payment. But the bank is past the proprietress out of this yes.
There you go so you find the balance be this one. But in you cash flow. This is the final balance minus the initial payment now final. But the initial balance is going to be the issue balance of month.
One it s going to be the final balance of the motor right before it and now we calculate the interest rates take the initial balance and multiplied by the one museum. We found before we talk to a dependent. So if you re working and i know you work in your no english spreadsheet make you just like pmt and then open the parentheses. Like this.
But this is not gonna work here because we re talking about we work here in a spanish spreadsheet. So we just type toggle toggle. And he s asking for direct to break this one transient comma and 24 months or 24 payments you can see mine about karma and the money you re asking for 105 thousand. The principle the payment of the principle is the payment minus the interest.
It is the initial bound the issue bonds..
Plus. The interest the payments. There you go now this okay. So i used to say fix this do with afterward.
Yep forward command of my soul make yourself itself and we ll take it down here. Then the principle is to the end of it final balance. She s going to drag it to the food court period and the payment you link it to the next cell. Until it gives you a balance of zero at the add more month 24.
Okay. So this is one way to make this of the other way is just let s just get rid of it paint this well you don t need to turn to yellow painting to you i just like to do that and you lick. It to the next cell and drag it down to the 24th period. And then you go to data that was in spanish analysis and yep that s the name find gold.
I know this command is called find gold gold find gold okay define the cell fine fine this last cell with the value of zero changing. The one in yellow enter and hit enter again and you enter again and you get the same value as you can see everything s fine now for the clock or the cash flow. You take the payment right double click here and to find final interest rate of this loan you need plus pr art and open appearances yes. But this is not gonna work here with reasons.
I told you so i get there we just select all the paints and the money you usually get your limit. This is one point four thirty six percent effective monthly and if you want to turn this into an effective compounded monthly. Just to compare it with the same units eternity to do this here just so stupid sometimes just turning just multiply. It by twelve event.
Very good this is founded that s a seventy seventeen point twenty to sixty sixty two percent compounded monthly. I think you were turning to an effective monthly. Just go ahead and plus one plus this rate to the 12th power. One effective unmolded.
Which is an effective rate..
Okay so false this is everything for this video and everything for now make sure just this is susan make sure to subscribe and i ll see you next time bye. sell 10 candy bars a year well guess what s gonna happen people who don t naturally want to buy a candy bar are gonna go buy a candy bar. Because wow. This is so rare this is so you know there s there s less of something does there s more demand for it so as a landlord.
If i don t increase. My rent five percent every year plus the cost of inflation. I m gonna miss that opportunity to raise the rents so if i don t raise the rents this year. I miss it and i can t take advantage of rank rent decrease previously there were landlords that didn t raise the rents that kept the rents pretty stagnant for a very long time now landlords are like you know what if i you know i don t have that liberty anymore to raise the rents as much as i want to now.
I m gonna have to raise the rents every year five percent every single year. This is gonna actually leave more damage to the tenants because now the tenants are like oh. I thought this law was to protect us now we got more landlords raising rents on us. When there s less of something more people wanted right if there s less of diamonds or less of gold.
More people want it if there s less of housing. The price of housing goes up this is where it s an issue so this is a great segue because i m gonna talk about what isn t a great alternative to rent controlling is rent control. The only way to solve this issue of rents going up is it the only issue of not enough housing for everybody so my solution to rent control instead of doing rent control. What the government should have done it i don t want me to sound political or anything like that i m just giving you my suggestion in my opinion purely from economic standpoint.
What the government should have done was incentivize landlords or incentivize roasted investor to go and build more house to go and build more apartments to go and build more units because more units the more house houses. There are available to everybody the less of the the price will go up which better in a better expression. When there s more of something it becomes less valuable. So if there s plenty of housing planning of apartments to go around for everybody.
There really won t be as much demand. Which means that the prices aren t gonna go up as steeply as we ve seen places like california in new york san francisco. Some parts of florida. My solution would have been hey tell all these investors the people with money to come and invest.
Here and give them an incentive such as hey..
We re gonna give you two years of tax break for you to come and build a hundred unit apartment building. Which means that now hundred more families have access to housing. Which is gonna drive down the cost or the price of rent the rent even further down. If we did it that way we didn t need to have to pass rent control laws.
So that s my that s my alternative that s that would have been my suggestion as a substitute for rent control. But i hope to see is that in the future this law will get appealed you re gonna see a lot more homelessness because more and more landlords are gonna raise the rents which means that less and less people are gonna be able to afford the rent so this is going to be actually detrimental to the economy. This is gonna be damaging to a lot of people were renting in california. Mainly because this is gonna have an opposite effect there s gonna be less housing the quality of housing is gonna go down it s not gonna be good for everybody.
It s gonna be a lose lose proposition for everybody no one really wins other than the government who s raking in the fees and and the money too for penalizing landlords that are not following the law so really tenants lose landlords lose government wins so helped us get give you guys a good explanation of right. There new rec control law and if your state is talking about rent control guys go and stop this law from ever happening. Because it s damaging for everybody it doesn t protect anybody it really doesn t if there s ever a talk for rent control oppose it here in illinois. We almost had rent control.
And luckily i called my my said hey don t ever pass a slow. This is gonna be super damaging to the state. I mean there s already laws that are damage to the state already. But this is going to even further damage.
The state even more so when there s ever talk from rent control make sure you partake in that conversation. Because everybody is affected by this law. I hope this video helps you guys with the with what s going on with rent control be sure to subscribe and like this video. ” .
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