Modifications and forbearance are hot terms in finance today. Modification is changing the terms on the loan. Forbearance is an agreement where the lender delays their right to exercise foreclosure if the borrower can either catch up to their payment schedule by a certain time or agree to extend the term of the loan.
If you are considering a settlement offer or if you want to pay off a settlement, you want to find out how much it is worth today. To do this, you need to calculate the present value, because the lump sum of your settlement’s value is going to be worth less in the future than it is today. When you have a claim to see how much money you would accept or pay today, a simple present value calculation is the answer.
Occasionally a customer asks whether making half monthly payments instead of monthly payments will pay off their mortgage quicker. The answer is no. Let’s assume a 30-year loan. You will only save part of one month’s interest over the 30 years so it is probably not worth it and this is assuming that your bank will process your partial half month payments timely.
Often, we have no activity on a loan or an investment but we want to know the amount of interest that is accruing or compounding. You can trigger the interest to appear by adding events such as a Payment or Invest for a $0 amount. This causes TValue to calculate the interest and, depending on the compute method, either add it to the principal if you are using Normal (compound interest) or to the accrued interest balance if you are using US Rule (simple interest).