Title: Advanced excel programming of time value of money in the context of real estate financing

Authors: Adedeji Badiru; Andreas Mertens

Addresses: Air Force Institute of Technology, Wright-Patterson Air Force Base, Dayton, Ohio, USA ' Air Force Institute of Technology, Wright-Patterson Air Force Base, Dayton, Ohio, USA

Abstract: The research objective of this paper is to develop a practical and functional software tool to serve the needs of both practitioners and researchers in the mortgage industry. The software development capitalises on published research available in the literature, as documented by the cited references. The spreadsheet tool presented in this paper carries out computational and graphical analyses of loan-based investments at the intersection of real estate and economics. The effort is thereby designed to referee the impact of the time value of money on real estate finance from a capital investment perspective. Based on specific data entries, the utilised methodology leverages basic and advanced modules to generate comprehensive information for the assessment of mortgage repayments or the corporate financial strategy related to real estate financing scenarios. The paper has practical implications, particularly in the light of real estate transactions: The computational spreadsheet program modules, calculations and visualisations can pertinently guide mortgage situations and provide a fertile toolbox for financial decisions made by investors. Amid the recent substantial interest rate risings and increase in real estate finance cost, the presented methodology with dashboard-style elements is designed to boost transparency in loan-based property financing.

Keywords: time value of money; real-estate investment; loan amortisation; corporate financial strategy; equity break-even point.

DOI: 10.1504/IJSRECE.2023.136437

International Journal of Sustainable Real Estate and Construction Economics, 2023 Vol.2 No.3/4, pp.260 - 291

Received: 10 Nov 2022
Accepted: 15 Jan 2023
Published online: 01 Feb 2024 *

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