## Bonus Checking

To understand this next spreadsheet, you have to take your accounting hat off and put your financing hat on. Consider all your sources of funding; savings accounts, money market accounts, CDs, borrowing, and checking accounts. There may be more, but considering the above, checking accounts will always be the cheapest source of funds. The reason […]

## Macaulay Duration Plus Balloon Payment

I was asked by a reader to add an option to the workbook “MacaulayDuration”. The option is to include a balloon payment. I added the option in a separate workbook called “MacaulayDuration_with_Balloon”. Read my post on “Macaulay Duration of an Amortizing Loan” for further information. Download “MacaulyDuration_with_Balloon” from: http://www.pistulka.com/Excel_Shared/ Downloads Written in Excel 2013

## Dutch Auction

The U.S. Treasury (and other countries) uses a Dutch auction to sell securities. This workbook contains two examples of how a Dutch auction might work. One assumes the bids are on a yield basis or discount rate basis, like Treasury bills. The other sheet is the same except it assumes bids are made on a price […]

## APR – Adjustable Rate Mortgage (ARM)

Like the previous post this worksheet calculates the APR, but for an adjustable rate mortgage or ARM. The difference between the fixed rate and the ARM is that the ARM cash flow is based upon reaching the fully-indexed rate, given the information available when the loan was made, and assumes it stays at the fully-indexed rate for the remaining term of the […]

## APR – Fixed Rate Mortgage

Given the inputs in yellow cells, check boxes and option buttons, this sheet uses an amortization schedule to calculate APR (or APY) for a fixed rate mortgage. Both Loan Balance and Interest Rate need no explanations. Truth in Lending Fees are additional dollar costs to the borrower to acquire the loan. Points represent a percent of […]

## PV and FV of Periodic Cash Flows

I thought I had already posted this spreadsheet, but it looks like I missed it. The sheet uses both formulas and Excel functions to calculate the present value, future value and also shows how to calculate the APR and APY on a cash flow, give either the present or future value. This sheet is very […]

## Modified & Effective Duration, Plus Convexity of a Loan

The spreadsheet has been changed for this post. Please go to: Effective Duration, Convexity, and Convexity Adjustment For Loans My last post showed the formula to calculate a Macaulay Duration on an amortizing loan. The definition of a Macaulay Duration I used was “an effort to more accurately measure the term of an option-free fixed […]

## Macaulay Duration of an Amortizing Loan

The term “duration” is often used interchangeably by market participants to denote either a volatility measurement, a weighted term to maturity, or a portfolio risk measurement. In practice there is more than one definition of duration. The following describes the most basic duration along with it’s calculations. In a future posts we will discuss Modified Duration, Effective Duration, […]

## Time Value Of Money

Back when financial institutions wanted your money and actually competed for your deposits, there were all kinds of gimmicks to entice you to deposit your money with them. One such gimmick was a credit union that was offering to pay the interest upfront on their certificates of deposit (CDs). If you are reading this blog, I probably don’t have […]

## Seasonality

Depending on the industry you are in, the seasons will likely play some part in your bottom-line. Back at the credit union, we knew that our deposit flows were affected by the time of year, holidays, and the makeup of our membership, many of whom were teachers. For my example spreadsheet, I used a set […]

## Valuing Servicing Matrix

On August 26, 2014 I showed  an amortization schedule that could be used for initially valuing servicing. I introduced the use of constant prepayment rates (CPR) in order to get a more realistic pricing than assuming the pool of mortgages or commercial loans would never prepay. Considering the ease of refinancing and the mobility of the labor […]

## Annuity

There is nothing special about this annuity calculator except: All input is with sliders Each line of the results are one cell text and formulas The dollar growth and payout balances are charted You can pick from monthly deposits or lump sum deposit Inputs: Outputs:   Download workbook “Annuity” from: http://www.pistulka.com/Excel_Shared/  Downloads Written in Excel […]

## TDR – Decision Tree for Notice of Defaults

After the housing bubble crash, defaults on mortgage loans became a big problem for financial institutions. A large number of homeowners either could not or would not continue to make payments on homes that were “underwater” (home value less than the amount owed on mortgages and other liens). After 90 days of no payments, a […]

## Two Mortgage Payoff Tables

Assuming you don’t have a balloon payment on your fixed rate 30-year mortgage, these two tables may be helpful. Table1 will tell you when your mortgage will be paid off, given making extra payments each month. Table2 is the reverse of Table1, in that you give it the number of years you want to have […]

## Credit Card Payoff

When you get your credit card bill you might see a box that tells you how long it will take to pay off the balance if you make the minimum payment. This spreadsheet shows the payoff years, give a minimum payment of the greater of: A percent of the balance A dollar amount The percent […]