How do I record a loan?
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Posted by Alvaro Illarze on October 03, 1999 at 15:49:46:
Hello:
I'm trying to record a loan in version 4.1 of FM, and I don't know how.
I'll put a simplified example. I asked for a loan of U$S 10,000 in two
semester payments of U$S 5,500
My first attempt was to create a new investment of "Bond" type
(being the loan a fixed rate investment, I thought bond will best fit
this). I thought the fields to fill would be something like: initial
amount and rate, but there were price and shares; so I filled this way:
in shares = (minus) the amount of the loan (minus because I receive the money)
the price = $1 (as the price of the dollar is 1) Then in both pay backs, I record:
Buy 5,000 shares (half of principal) of the investment
price= $1.1 (to account for the interests) This doesn't seems to work, because if I ask for a yield graph, I
obtain a positive yield (wish it was this way :-)), and if I see
my portfolio value, it doesn't makes sense 'cos I just have two
prices for the loan, 1 and 1.1, and this doesn't account for the
evolution of the loan (I'm not asking to see the daily evolution
of the loan, but there should be a way to see the actual value of
the bond, without writing down 360 prices, and I don't find it). Probably if I had invested in a bond, I would have seen the same
problem but the other way round; is there a way to - say - make
the prices a line interpolation from the first price to the last
taking into consideration the intermediate interest payments?
I like this product, is preety good. Thanks a lot, and hope to
hear from you.
Alvaro P.S.: After I wrote this, I found Post 992 from Philippe, called "monitoring
Bonds and Alike", and though I'm not asking for that complexity (yet),
I strongly support his beg.
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