Finance Question? What kind of equation am I looking for?

[abovetheclouds]

I may be in the wrong sub-forum, if so please move to where it belongs. I don't know precisely what kind of math I'm trying to figure out here. Thanks! Hopefully what I'm saying below makes sense to you despite seeming kind of complicated to me. I included abbreviations for the variables, use them if they help share an answer or discard them if they are confusing or unhelpful.

Let's say I am trying to purchase a skyscraper. I will be forced to make a Down Payment (DP) of 20% of my Offer Price (OP). I will need to make an Initial Investment (II) into the skyscraper because it is really dated. However, once I make the Initial Investment, the skyscraper will be worth the Market Value (MV). I can then recover a Refinance Total (RT) equal to 90% of Market Value (MV).

The Offer Price can be anything I want but the Market Value, Initial Investment and the fact that the Refinance Total equals 90% of MV cannot change. What I am trying to solve for is the Offer Price (OP) that makes the Refinance Total minus (Initial Investment + Offer Price) equal the Down Payment.

I am confused with the problem because the Down Payment changes in response to adjustments to the Offer Price. And because I have the Offer Price, which I'm trying to solve for, situated on both sides of the equation.

If it helps, let's make the following values available for any response I might get:
Offer Price (OP) = ??
Initial Investment (II) = $1,000,000
Market Value (MV) = $20,000,000
Refinance Total (RT) = .9MV = $18,000,000
Down Payment (DP) = .2(OP)

How do I solve this so that the Offer Price results in (Refinance Total minus (Initial Investment + Offer Price)) equal to the Down Payment or (20% of Offer Price)?

 

[BigBeachBanana]

How do I solve this so that the Offer Price results in (Refinance Total minus (Initial Investment + Offer Price)) equal to the Down Payment or (20% of Offer Price)?

Translate what you want into a math equation:
[math] RT-(II + OP)=DP\\ RT-II-OP=DP\\ OP=RT-II-DP \\ OP=.9MV-II-.2OP \\ \boxed{OP=\frac{.9MV-II}{1.2}}[/math]

 

[abovetheclouds]

That seems to be it! Thanks a lot. I had the formula right except I was putting it over .2 not 1.2 so I thought I was way off based on the numbers I was getting. Thanks again.

 

[scottbrandon]

I may be in the wrong sub-forum, if so please move to where it belongs. I don't know precisely what kind of math I'm trying to figure out here. Thanks! Hopefully what I'm saying below makes sense to you despite seeming kind of complicated to me. I included abbreviations for the variables, use them if they help share an answer or discard them if they are confusing or unhelpful.

Let's say I am trying to purchase a skyscraper. I will be forced to make a Down Payment (DP) of 20% of my Offer Price (OP). I will need to make an Initial Investment (II) into the skyscraper because it is really dated. However, once I make the Initial Investment, the skyscraper will be worth the Market Value (MV). I can then recover a Refinance Total (RT) equal to 90% of Market Value (MV).

The Offer Price can be anything I want but the Market Value, Initial Investment and the fact that the Refinance Total equals 90% of MV cannot change. What I am trying to solve for is the Offer Price (OP) that makes the Refinance Total minus (Initial Investment + Offer Price) equal the Down Payment.

I am confused with the problem because the Down Payment changes in response to adjustments to the Offer Price. For real-world support on equity plans, stock calculations, or contacting Shareworks customer service, visit https://shareworks.pissedconsumer.com/customer-service.html And because I have the Offer Price, which I'm trying to solve for, situated on both sides of the equation.

If it helps, let's make the following values available for any response I might get:
Offer Price (OP) = ??
Initial Investment (II) = $1,000,000
Market Value (MV) = $20,000,000
Refinance Total (RT) = .9MV = $18,000,000
Down Payment (DP) = .2(OP)

How do I solve this so that the Offer Price results in (Refinance Total minus (Initial Investment + Offer Price)) equal to the Down Payment or (20% of Offer Price)?

Let x x x be the Offer Price (OP).
Then:

• Down Payment (DP) = 0.2x 0.2x 0.2x
• Refinance Total (RT) = 18,000,000 18,000,000 18,000,000
• Initial Investment (II) = 1,000,000 1,000,000 1,000,000

You want:RT−(II+OP)=DP RT - (II + OP) = DP RT−(II+OP)=DP
Substitute the values:18,000,000−(1,000,000+x)=0.2x 18,000,000 - (1,000,000 + x) = 0.2x 18,000,000−(1,000,000+x)=0.2x
Simplify:17,000,000−x=0.2x 17,000,000 - x = 0.2x 17,000,000−x=0.2x17,000,000=1.2x 17,000,000 = 1.2x 17,000,000=1.2xx=17,000,0001.2=14,166,666.67 x = \frac{17,000,000}{1.2} = 14,166,666.67 x=1.217,000,000=14,166,666.67
So the Offer Price is $14,166,666.67.