There exists within the realm of music a place where conventions are challenged Sacred cows are tipped and the art of reinvention is not lost on anyone to get to this place You need to go outside the music box. It's a podcast about people centered on music and it begins now Hello everyone and welcome to outside the music box. My name is James Newcomb, and I will be your master of ceremonies in this episode Today we're talking the ins and outs of intellectual property and according to my guest Stefan Kinsella Intellectual property should definitely be out Stefan is a legal theorist. He is a patent attorney in Houston, Texas And he's also the author of a book called against intellectual property in his book Stefan takes the view that intellectual property is not property at all and to consider things such as ideas songs recipes code to be property actually hinders the value of Real property property meaning things that we can physically own such as real estate cars houses, etc Now people listening to this will probably object saying well We have to have intellectual property if we didn't have intellectual property then anyone could take my Idea and profit from it. So therefore I must protect myself so that other people don't use my own ideas for profit Stefan can obviously articulate his Points and his positions better than I can so I'm going to leave that to him The reason I brought him on is I simply want people to think a little more broadly Maybe look at this issue in a different light than you may have heard in the past So we're going to get into my interview with Stefan Kinsella in just a moment but I want to read an article that I found on Facebook and It is related to David Bowie who sadly passed away just this past week And it's interesting that I found it because it perfectly ties in with our topic of intellectual property Bowie was actually a bit of a forward thinker as far as How he saw the music industry was going to turn in the future And I'm just going to read this short article. It's by Anthony Fisher and It's titled David Bowie foresaw the collapse of the music industry and adjusted accordingly The late great David Bowie wasn't just a gender-bending shape-shifter and a persona generator He was the rare rock star who not only survived the ravages of drug addiction But also had enough sense of self-preservation to diversify his economic portfolio Before the music industry imploded In 1997 under the guidance of banker David Pullman the creation of Bowie bonds allowed the musician to sell the royalty rights to the 25 albums he recorded before 1990 for a lump sum of $55 million with the buyer of the bonds receiving all future revenue brought in by Bowie's back catalog plus 8% interest Seems like a good deal At the time Moody's blessed the bonds with quality a rating From Bowie's point of view his financial future was too dependent on the vagaries of his popularity By selling some of his royalty income to others Bowie was able to diversify his investments He reduced the risk that a major shift in the public's musical taste would leave him a popper Meanwhile investors who had not previously had any stake in the sales of Ziggy Stardust Could diversify into that area and earned a decent interest rate while doing so In 2002 the erstwhile Bowie presciently told the New York Times Quote the absolute transformation of everything that we ever thought about music will take place within 10 years And nothing is going to be able to stop it. I see absolutely no point in pretending that it's not going to happen I'm fully confident that copyright for instance will no longer exist in 10 years and authorship and intellectual property is in for such a bashing Music itself is going to become like running water or electricity So it's like just take advantage of these last few years because none of this is ever going to happen again You'd better be prepared for doing a lot of touring because that's really the only unique situation that's going to be left It's terribly exciting, but on the other hand it doesn't matter if you think it's exciting or not It's what's going to happen David Bowie saw the handwriting on the wall so to speak He had the ability to see that the music industry as he knew it and the way that he made a fortune was In for a very rapid change So it's a very interesting timing for that article to be to come to the surface Right when this episode is releasing So before we move into my interview with Stefan allow me to take just a moment to tell you about a gift That I would like to give you There's no obligation. There is no email list to sign up for I simply want you to have it It's called the go-getter and it's a very short story written by Peter Kahn in the 1920s and it's indispensable for Salesmen entrepreneurs anyone with ambition in any facet of life It is my gift to you go to outside the music book Com and while you're at outside the music book calm consider a trial run of audible You can have an audio book of your choice Delivered straight to your device your computer and even if you cancel your membership before the 30-day trial ends You get to keep that book for free go to outside the music book calm for more information So ladies and gentlemen here is my conversation on intellectual property with Stefan Kinsella Well Stefan for the benefit of people listening to this. Let's just get a working definition of property and I'm referring to a statement that you made in your book Doing business without intellectual property more of a pamphlet than a book But you said that intellectual property is a blatant infringement of property rights So before we Get into that. Let's just get a working definition for purposes of this interview What exactly is property in your view? Property rights Is the legal respect That gives someone the exclusive right to control a given resource So, you know, we live in the world. We're physical beings There are things that we need to control and use in our daily lives and as we Produce and live we need control over those things Those things have a nature that we call in economics scarcity or sometimes economists call it rivalrous Which just means there's a type of resource that can only be used by one person at a time And if you don't have a set of rules that determine who the owner is Then you could have conflict or physical fighting over these things Okay, so if you build a house, then you get the right to use it and control it So the word property Technically means a property right in a resource. It just identifies who the owner of a resource is Sometimes people use the word property to also refer to the thing owned. So they'll say that house is my property But technically speaking, I would say you're the owner of the resource You're the owner of the house. You have a property right in the house I think the word property is used because We recognize that when we act in the world We extend our influence in the world by using these other means of action, you know, like houses and food and tools it helps extend us into the world so it becomes a property of yourself in a sense it sort of Extends the identity of what and who you are. So I think that's why the word property is used But really it's the question is who has a proprietary interest that is an ownership interest in a given resource So property rights really is just a system where we can identify who owns a thing So that we can all respect that right and so that they can be used peacefully and in trade Without us having to physically fight and clash over those things Very good. Now, how would What is the difference between in your view? Property as you just defined it and intellectual property such as ideas Songs that are written. What is the difference between?  Yeah, yeah, and I wouldn't say that it's not property What I would say is it's not the type of thing which can be the subject of property rights It's not something that's ownable a tune is a pattern of information, right? It's just knowledge It's it's a pattern that Tells you how you can manipulate an instrument or your vocal chords to create a sound that might be pleasing Or useful or whatever A software program is just a pattern of information The design of a new automobile Engine or component is just information that people can use so if you understand What human action is and this is sort of an economics concept that the austrian economist school Um talks about a lot, but it's very common sense When we when we work in the world when we act in the world, we have to employ these scarce resources We have to use our body, which is a scarce resource and other things like I mentioned earlier tools food land Lumber or things like that you have to use those things to get things done However, you also have to make a decision about what to do In other words your action your use of these scarce means The things that are subject to property rights and that are owned Your action is guided by knowledge or information that we have in our brains and our minds So there are two important aspects to human action One is the ability to employ these scarce resources But also the knowledge that you have In your head that that helps you choose what to do and to hopefully have more successful rather than unsuccessful action The domain of scarce resources that we have to use is subject to property rights because there's the possibility of conflict over them Things like tunes like songs like poetry like novels Like inventions or knowledge that guides what we do But these things are not subject to conflict and they cannot be owned actually Um, it's possible for a billion people to use the idea that Cooking food with fire makes it safer and more tasty than eating raw meat Everyone can use that idea at the same time They don't have to conflict with each other to use that idea the same thing with the song Everyone can sing the same song in their own house at the same time Um without conflicting with each other So the idea of property rules Which is designed to avoid conflict makes no sense when it comes to things that are infinitely Once they infinitely abundant, but they're infinitely copyable and they're usable by many people at the same time So the problem is when the law treats tries to treat things like songs and books As being ownable or property rights What it really does because it's like literally impossible to own a song What the law really does is it uses that as an excuse To give the owner of the song the right to take money from someone else now the money is what they really own Okay, so basically An artist can use copyright for example, which is one type of intellectual property law to Sue someone To prohibit them from singing a song or publishing an album or publishing a book or selling a book Unless they pay a fee To the owner of the copyright So it's really just a disguised way of giving ownership in other people's resources like their money To these to the holders of copyright I was wondering if you could give a brief history of intellectual property Here in the united states because in my preparation for this interview. I was reading a book called Uh against intellectual monopoly. I believe it's the name of it by bolder than the being. Yes. Yes. I don't have it right in front of me It's online actually against monopoly.org. It's a it's a great book. It's from an empirical point of view more than my view which is more uh libertarian Properitarian principled base, but it is a very good book Well in this book they were describing a little bit about How intellectual property in the means of copyright Actually helped authors in the united states actually British authors would have their books published in the united states And they had far more success selling their books because there were no copyright laws in the united states So when exactly did Copyright and patent and trademarks and all of that become so Engrained in the american uh, just the psyche the way of doing business No, that's a good question. Um Uh, there's another very it's a pretty short essay. It's by um Carl Fogel, he's got a site called question copyright dot org And he's got an article on there where he goes into the history of copyright, which is pretty interesting But I can just quickly summarize here Um, most people now we have a very capitalist commercialized society where all these legal rights are traded back and forth and You know, we have stock markets and authors selling their rights Assigning their rights to others, you know, jk rolling making lots of money by doing movie deals So we think in terms now Of copyright and patent is just being part and parcel of a free market advanced capitalist society copyright and patent Uh, originated in the practice. Uh, well patent originated patent is a type of legal right that protects the right and inventions useful processes or machines, let's say Um copyright protects the works in artistic creations. Okay original works of of of expression Copyright arose when the printing press Started threatening the monopoly the stranglehold that the church and the crown Had on what thought could be disseminated, right? Because it was easy to control that by just having the scribes Hand hand copy only the books that the church would permit them to to copy etc when the printing press originated I think in the 1500s or something like that Well, then you had the the threat of just books being produced on a wide-scale basis without the control of the authorities And so the the the government established in england the the stationers company Which was like about a hundred-year guild system Which was like a monopoly system which protected It was like the only way to get a book published through the stationers company When their monopoly ran out the publishing industry was used to this situation and lobbied for a renewal of the Charter which was not granted, but instead the statute of and was passed in 1709 Which was sort of the first modern copyright? It granted the copyright to the authors instead of to the publishers, but the authors as a practical matter Had to assign their rights over to the publishing house just to get their works published anyways So it it it ended up We ended up with the system Which we see the relics of even today where you have a large publishing industry for novels for songs for software Where they have a lot of control and the authors often make very little money because the publisher has a lot of upfront costs Etc that model is being eroded a little bit because of the advent of e-publishing and amazon and things like that And you know just the ability for artists to put their music online to get to get customers Etc, but that is why we had that industry emerge patents emerged In the phenomena of kings granting monopoly privileges to court favorites In a certain area just saying you're the only person who can make playing cards You're the only person who can export sheepskin They would just give them this monopoly because it gave them a competitive advantage And in return they would get favors back from these people like they would they would become tax collectors for the government or something like that This got to be abused by the king and so the parliament england Enacted the statute of monopolies in 1623 To reign this in but they kept the right to grant monopolies for inventions so patents emerged arose historically in the practice of the state granting monopoly privileges to people And copyrights arose in the practice of basically censorship And they've evolved they've evolved over time and to in the u.s. Constitution when it was ratified in 1789 Had a provision that gave congress the ability to Protect the works of writers and artists and inventors And the very next year the congress enacted the first patent and copyright statutes So that's how we got to where we are now Well, I want to talk a little bit about your uh, you take a very hard-line stance against intellectual property Obviously as your as your title as the title of your book suggests But I want to get a little bit More detail as to how Do you view? intellectual property actually hindering progress for example, uh someone patents uh some invention How does that hinder innovation and how does that hinder progress? Okay, so here's the way I look at it. Let me just uh explain I am a libertarian. I'm in favor of free markets. I'm in favor of capitalism I'm a favor of knowledge and progress and innovation. I'm also a patent attorney. So I know a good deal about it I've been doing it for over 22 years now um So I have a lot of experience with the way the legal system works the patent system the copyright system trademarks and the other types of intellectual property um The the argument that is given for patent and copyright Nowadays is usually not really a natural rights when it's not really you deserve The ownership of these things because if you did then they wouldn't expire after a certain time patents expire after about 17 years and copyrights expire Like say 70 years after the author dies, but they're both finite terms if this was a natural right It would last forever just like if you own a house or a watch you could pass it on forever to your heirs It wouldn't expire in a certain time So most people that defend intellectual property now have a utilitarian justification what they say is that We need to grant to artists and authors and creators um Movie producers, you know songwriters singers and inventors. We need to give them a temporary monopoly To protect them from competition So that they would have the adequate incentive to produce these works and that without these laws We would have fewer works and an underproduction of creative works That is the basic argument that's given So my my main objection to that argument Is that they simply don't fulfill their their argument. They don't have any evidence to back this up It's just it's said over and over again But every study that you can find that's been done over the last 200 years and most of them in the last 50 to 60 to 70 years When we finally started looking into this all the empirical studies all the economic studies Keep concluding that it looks like There's no clear evidence that patent or copyright Stimulate any increase in production of what it's supposed to stimulate and in fact It has a severe distorting effect on the culture and on what's done and it's causes lots of costs which reduce innovation um in the case of uh technical innovation, which the patent field is supposed to cover granting someone a patent On a product can reduce innovation but for in several ways number one let's say you have a company like Apple or other some of the other big smartphone companies motorola My uh even microsoft now, uh google okay, they have Hundreds or thousands of patents which they paid lots of lawyers to get And they are willing to defend those patents in extremely expensive lawsuits So if you're like a new upstart innovator on the outside and you wanted to come up with a brand new smartphone design You would be sued out of existence if you tried to compete because you wouldn't have the resources to Come up with 10 million dollars to defend yourself in several patent lawsuits that you're going to be hit with From the big guys and even if you did have the money you'd probably lose because they do actually have patents And some of them are actually valid and they would actually win their cases and put you out of business or by your company So that dissuades or discourages innovation um in cases like that and just as a general matter um companies are aware of Of what they call patent thickets where there are areas that are heavily patented And they just steer clear of innovating in those areas because they know that it's pointless to innovate in that area Because they wouldn't be able to sell their product anyway So they just don't even engage in r&d in an area where they wouldn't be able to sell a product So that's just one example. Um, the other example or another reason is that The patent system itself imposes extremely immense costs on the economy and on businesses um salaries for lawyers like myself insurance costs defending themselves in litigation uh Really does take away from the bottom line and causes the prices of products to go up. It makes the consumer worse off It's basically like a huge Let's say trillion dollar a year global tax on On technology and that tax reduces the amount of resources that companies would have left over to engage in r&d in the first place um another example is If you have a patent or a series of patents covering a product You have basically a 17 year monopoly window where you're not going to have any competition So you don't have a big incentive to keep innovating. You don't need to you can just rest on your laurels And you don't need to keep improving your product a lot because you have patents In fact, the only reason they're going to keep improving their products is to get a few more patents to extend their monopoly But it's a game at this point So there's lots of common sense examples and reasons you can point to As to why the patent system impedes innovation But even if it didn't impede innovation even if the patent system Even if you could come up with a study that showed that there's more innovation With a patent system than without it that still doesn't show that it's justified because there's still a big cost to the patent system Like let's say it's only order of a trillion dollars a year. I've done studies other people have done studies. It's a big cost Well, if the innovation that's stimulated is only worth 200 billion dollars a year But you're calling it's costing the economy a trillion. It's still a net loss for the economy. It's still not worth it. So the advocates of patent It's been 200 plus years They really need to come up with a study showing that their system does what they say it does and they have not and they cannot Well, I want to turn the focus Back to music because this is a music based podcast outside the music box But you mentioned the the printing press a little while ago and the internet is very much Like the printing press Has very much the same effect as the printing press had in the 1500s where now you can Duplicate songs you can duplicate text Just at the click of a mouse button. It's so easy. Yes It's I mean compared to 20 years ago. It's it's so different I want to get Your sense of what is it like For musicians now just real world application. For example, I have a lot of musician guests on this podcast and a lot of them are promoting an album And I will ask them to Send me a file that because I like to play their music. I want to feature them as much as possible So they'll send me a file and I play it on the episode What rights do I have and I'm not just talking about theory. I'm talking about real world application At to what extent do I own? That file that they have sent me so For example, if someone sends me something to play on one particular episode Do I have The legal protection to play that on any episode of this podcast that I want Just for example Yeah, so it's not clear and this is part of the problem with copyright Um Under my system the way I would look at it theoretically is we wouldn't have copyright And patent and songs wouldn't have an owner. It's just information if someone sends you a song Then you have access to that information you can use it however you see fit if you have a contract with that person Either an implied contract or or expressly a negotiated contract where you agree Not to use the music in a certain way or you agree to keep it private Then that's a private contract and that's fine But we know these these things can only work so far because once information gets out it's out, right? Once knowledge is public it's public and you can't put the genie back in the bottle under today's system The way it works is um, whenever you whenever you create Uh an original work of expression and it's fixed what we call fixed in the tangible medium That means you write it down or it's recorded somehow It's not just a song you sing at a party that no one records You don't have a copyright in that because it just disappears as soon as you're done It's got to be fixed somewhere written down on paper stored in a medium something like that which it usually is When that act happens, but the way the copyright work law the works now since the 1980s is that copyright is automatic You don't have to apply for copyright. You don't have to put a copyright notice on there You can't even say no you have the artist the author Has a copyright in that work whether they want it or not and it's almost impossible to get rid of now When you when someone sends you this file It's similar to sending an article to a magazine for them to consider for publication and if they publish it You really can't sue them from copyright infringement because you gave that you you implicitly gave them license or permission to use it That was the purpose of sending it to them. That's usually how that's works Um, you know the more careful publications would send you a release or something to sign to make it clear But even if they don't then, you know, it's just like if I if I publish a letter Or a comment on a blog that someone else owns I'm giving that blog owner permission to post my My copyrighted comment. It's just the way it works. So if someone sends you a song In the context that you described, I would say that they're at least giving you implied permission to use it at least the first time Um for the for the purpose that you were you were both contemplating But the nature of the internet is such that your podcast will be up Maybe forever and it's easily copyable by others So whether you can use it down the down the road I suppose if you try to use it over and over and you started having a commercially successful podcast And we're making money off of it You could imagine getting a letter from the attorney from one of these early artists saying I hereby revoke my permission for you to use this now If you want to keep using it you need to pay me Money and then either whether the right or wrong you would have to take the risk of a big copyright liability So you you probably would just comply. You'd either pay them some money or you just quit using it Um as for the internet you're right. There are parallels actually to the situation I explained earlier with the printing press I think Cory Doctorow who's a well-known tech advocate and and author himself He pointed out that the internet is the world's greatest copying machine and it's never going to get harder to copy than it Is now it's only going to get easier and easier And this bugs it drives people nuts that are used to a model From the 60s and 50s and 70s where copying was hard Okay, they they built up publishing models and and business models based on that And they don't like the fact that it's easy to copy But actually the fact that it's easy to copy is technologically a good thing. It's a great thing This is how we communicate with each other. It's how we learn.  Everyone's doing streaming now, right or piracy That's what people are doing And the streaming models are great for the consumer My impression is that the artists are not going to make as much money From the little payments they receive from apple music and spotify than they would from sales back in the 80s Or or whatever. I think that that era Has changed So artists are going to have to get compensated in other ways. They'll have to do it as a hobby Or they're like they've always done to some extent or they'll have to perform At concerts and you know, the more popular they are the more the more fans they'll get and the more they can charge And they get popular by people knowing their music So it's actually I think in artists and singers benefit That people can easily have access to their songs Well, that's a great segue into and you've been very generous with your time, but before I let you go Stefan I want to just get some Practical advice from you because you're an expert in this field Because a lot of uh complaints that I hear from musicians is exactly what you've just talked about They view the Music that is so easily So easy to be copied as a bad thing, but right how how should a musician who is You know, they're not they're not Led zeppelin. They don't have a big name, but they're trying to make a name for themselves in whatever niche that they find How can they use the current? Model or the current technology as it as it exists today to their advantage Well, and let me mention one thing too. You say that they don't like how easy it is to copy However, how many of those people have themselves copied and benefited from the ease of copying How many of these people have learned from the greats from the, you know, uh from from From history and even from recent days. I mean, it's been a great boon to them as well to have a wealth of material to draw from to to get inspired by to sing to cover at their own concerts So it's a there's a little hypocrisy in this desire to Be to benefit from the ability to copy others And uh wanting to, you know, close the door to heaven behind you once you get into the gate And as far as practical advice, I did write a pamphlet which you mentioned it's called doing business without ip and There's sort of two parts to that one is like more of a theoretical thing imagining How life would be like in a copyright free world. We don't live in that world So let's talk about today's world. Well, there's a moral aspect to it. I would say number one On the politics front just as a person you should Advocate for the abolition of patenting copyright. That's just what we should do as a correct policy position and number two I would say it's immoral Once you have a copyright and you can't help having copyrights It's immoral to use it to sue people who are innocent people You just shouldn't threaten that you shouldn't do it. The government gives you this right It's wrong. The government shouldn't give anyone that right and it's wrong to use it against an innocent person So I think you should not threaten to sue people But using your patents or your copyrights. So I think that's a personal ethical thing In terms of how you actually make it given and navigate the the actual system out there You need to be aware of what the rules are. You need to be aware of the danger of copyright Infringement you might get in trouble for You know, if you sample the wrong things if you if you put something on youtube that has a clip of someone else's song You could be in trouble. So you need to be aware of what to avoid doing, right? um And I think you also need to be aware that no matter what your your copyright rights are That the piracy is a real thing now and it's just going to happen Even even if we have the most draconian copyright laws, you can imagine which we pretty much already do Right. I mean, there are criminal penalties can be subjected for piracy This is why Aaron Swartz committed suicide because he was facing Years in prison a young kid facing years in prison for copying some academic articles from From from from an ivy league school. It was it was crazy um You know, you need to be aware that piracy is just the thing now the internet makes it possible to copy So you have to be aware that you might make some money from some of the legitimate avenues like apple music or spotify um But I think it's to the benefit of an artist who's not lady gaga or someone like that to book to get well Known, right? I think quarry doctor had another good line You know the the the threat any author or musician has Is not that people are going to pirate your work. It's that you're going to be obscure and no one's going to know who you are That's the real threat. So I think you should people should encourage If you have a concert don't get upset that people are taking photographs or recording a few minutes with their iPhones You know be happy about that Make money from satisfying your fans in ways you can charge for which is basically concerts or specialty gigs or producing music for um for someone's uh documentary or for their movie Or for their daughter's bar mitzvah, you know, there's lots of things people can do Ultimately you have to view yourself as an entrepreneur and it's it's the job of the entrepreneur to figure out how to make money and that is you have to look you have to be creative and We maybe have to be more creative now because of the challenges of easy copying and the internet But it's also a great new world out there. I mean you can be known um You know, there's there's some people on youtube that are making millions of dollars a year because they're popular They figured out how to be popular. They're not doing it because of copyright. They're doing it because they do They're doing something that makes them popular so ultimately I would say produce excellent quality music and Then then it's going to be a good problem to have to figure out how to monetize that Well, you have uh opened a lot of cans of worms in my own mind And I probably side with you more than a lot of people listening to this. So Stefan, how can people uh get in touch with you if they want to know more A little bit more about what you've had to say today I have a podcast which is on my website StefanCancella.com And I write a lot about the intellectual property issues on another blog which is linked from there But it's c4sif.org which stands for center for the study of innovativefreedom.org c4sif.org All right. Well, we're certainly going to post links to that on the show notes Which you can find at outsidethemusicbox.com But StefanCancella it has been a true pleasure to speak with you and I thank you for sharing your insights with us Thanks much. I enjoyed it And that'll do it for yet another episode of outside the music box My thanks to my guest StefanCancella and my thanks to you the listeners for tuning in As Bob Dylan said the times they are a change in And it's time for us as musicians as people To think about things differently and intellectual property is one of those things that Definitely requires us to take a different look Next week on outside the music box is going to feature Landau Murphy Jr. Who is the winner of the 2010 season of America's Got Talent? He has an amazing story and I can't wait to share it with you So be sure to tune in next week on outside the music box. Thank you


Okay. Good evening everyone and welcome to your sixth session of Accolate. Please make sure that you complete the register in the chat before you leave today and today's session we're going to be discussing amortization and I hope you have your financial calculators but if you don't have your financial calculator it's fine I will show you how to do the questions manually but when we do activities sometimes you might not be able to catch up with us because we only have one hour 30 minutes I will try my level best to accommodate both those with the calculator with the financial calculator and those without a financial calculator it is very important that we do that so that we don't leave anyone behind. So in terms of the session next week will be the last session that we're going to have and I'm assuming we or not assuming I'm planning to do manipulation of equation but I'm going to extend it not just focusing on the just how to solve for x or how to solve for y but includes simultaneous equations include inequalities as well so if those who are doing B and U you might find some of the content not relevant to you and some of the content might be relevant for you but because you're doing B and U the chances are next day you will be doing QMI or next semester you will be doing QMI therefore it means it's easier when you have the knowledge and the skill and it will be something that you not silly for the first time so bear with me on that note because that is our last session in terms of actual academic literacies and then I planned on doing exam preparations because here we've got two modules we're going to split it on the 6th of June only those who are doing B and U you must come to this session I will also share this on the WhatsApp groups as well and then on the 18th of June only those who are doing QMI can also attend that because then the B and U students you will have written your B and U exam as well or a day or also you would have written your exam okay so let's get on to today's session which is amortization before we do that do you have any questions for me before we begin any questions any comments no questions no comments for me then we can start this session like I said we're going to be doing amortization and I expect you have your calculator and you need to also know and understand how to answer the questions without using your calculator as well in terms of using formulas by the end of the session today you should be able to calculate payments of a mortgage or a loan it can be for a car or something so you should be able to calculate payments of a loan and some of the concepts we have lent them the last time if you would watch annuities annuities are payments and we are going to continue and doing the same to calculate the payment we're going to use the annuities but we also going to use the present value of an annuity formula to calculate the payment for amortization once you have your payment then you are able to set up your amortization schedule and in terms of your modules you should be able to answer the questions based on your amortization schedule as well so we're going to teach I'm going to show you how to set up the amortization schedule manually and also I'm going to show you how to set it up using your calculator and remember with the calculator always the steps are the same the first step you do is to clear your calculator from any start beams so we're going to follow the same concepts that we have been doing the whole time okay so what is amortization in general amortization are just all your liabilities both the principal and interest that are paid by a sequential equal payments that are made at an equal interval of time so in your modules QMIO BNU you also need to realize that they will not ask you to change interest rate they will not ask you to change the number of payments while you are working on the problem only the next question might ask you if interest rate have changed and then you can just adjust but you go into your interest and your payments will stay the same for the duration of the period of your amortization in your module okay so in terms of the payment we're going to use the present value of an annuity and that is the formula to calculate don't ask me what this a and i mean because then this is your payment is your principal your present value divided by the accumulation factor of an annuity which is one plus i which is one plus i to the power of n minus one divided by i times one plus i to the power of n and that is your accumulation factor which is this so you must remember the formula for present value of an annuity so as the outstanding principal decreases with your payments the interest you owe at every period will also decrease because the interest we're going to always calculate it using the principal amount as well the fraction of the payment which is available for reducing the principal will increase with the time so it means when you look at your principal value which will be the last column that we work on every time you make a payment that value will always increase with time because that is the value without payment that absolutely without interest that is the amount that you are paying towards your loan excluding interest and it will increase with time then to create an amortization schedule based on all the information that i just explained to you you need to have a period which it can be quarterly yearly by annually in this instance my table shows the year but this is generally your period so how many amortized values you're going to have so if it's quarterly and it's for one year therefore it means you will have periods there will be four of them because it's yearly it's four if it's two years that means you will have eight periods which means those will be the eight times that you will make the payment your first column after the period will be your outstanding principal or your present value or we can call it the outstanding principal or we can call it the closing balance or we can call it the opening balance it will be an opening balance for that year but in the following year it will be a closing balance and also an opening balance for the previous year your b will be your interest we always calculated using the simple interest rate and i will explain more on this later on when we do some activities we always use simple interest remember simple interest is i is equals to p times r times t your payment that will be your present value of an annuity payment that you would have calculated and that is the first thing that you calculate and then the principal repeat it is just your payment minus the interest so what i just explained the first step that you do with amortization schedule is to draw up a table that has the period op which is outstanding principal your interest your payment and principal repeat once you have that table the first step that you do is actually is to calculate the periods you populate your periods depending if it is compounded monthly and for five years that means you will write 60 rows one up to 60 on your amortization schedule that will be your period then the first step that you will do is to calculate the payment once you have calculated the payment then you can calculate your interest by using the simple interest your t will always be equivalent to one or equals to one because it's for that year or that period or that time which will always be equals to one the others might change your p will be your outstanding principal at that point your r will be the rate divided by the compounding periods because it will be compounded so your rate you will have to divide by the compounding period your period team will always be equals to one it doesn't change it will always be one your principal repeat will be your payment the amount you calculated in terms of the payment minus your interest and the other thing that you need to also remember is once you put the periods all 60 of them you also calculate your payment and your payment you completed it stays the same for the entire duration of your loan so if your payment was 200 you go into right here 200 200 up until you get to row number 60 if there was five years compounded 12 uh monthly and so it will be 60 you will write the same 260 times and your outstanding principal will be your previous outstanding principal minus your principal repeat and that will give you your closing balance so for line number one it will be your opening balance will be your present value of the amount that you are loaning so if you take a loan of 250 000 the first row will be 250 000 then you calculate your payment on that 250 000 you calculate the interest and from the payment and the interest you calculate the principal repeat and from the principal repeat we need to create a closing balance in line number two the closing balance will be your opening balance on your first line minus the principal repeat of the first line and that gives you your closing balance but it is also your opening balance for year number two or for the period number two so period number two you go again you calculate the interest based on that period number two because your payment is already there you just calculate the interest on period number two and then calculate the principal repeat by subtracting your payment minus your interest that gives you your principal paid for payment number two once you have payment number two done with the principal repeat you go to line number three you want to create a closing balance by taking the opening balance of line number two subtract the principal repeat of line number two that gives you the closing balance and I know that I am talking like this is like I'm saying something let's do it so that you can see what I am referring to let's draw up an amortization schedule for a loan of 4 000 for three years at 15 per cent per annum compounded half yearly and it is repayable in six half yearly payments the first step of everything that you do is read the statement make sure that you understand what the statement is asking you to do and identify the facts that are given in the statement highlight them write them draw them do whatever you want to do with them but make sure that you understand what is given and if there are any formulas make sure that you write that formula down and use that formula to calculate okay so we now know so we now know what we need to be doing because the statement said we need to draw up an amortization schedule in the exam they will not ask you to draw up an amortization schedule right they will ask you question based on an amortization schedule but you need to know how to develop one or how to draw up one what else are we giving we are told that the loan is of 4 000 that means that means they have given us the present value and they are telling us that it's for three years therefore our period t is three years and what else and they telling us that the rate is 15 so it means our an is 0.15 what else and they say it is compounded half yearly so my compounding period half yearly it means two twice in a year half yearly they're splitting the year into two parts so therefore it is two and since I know what my compounding period that I need to come to my year which is t I must multiply it with the compounding period and I must divide let's use the division sign the the mathematical division I must divide this by two and they say it is repayable in six half year payments so which means there will be six of them because three times two is six okay so I identified everything I need the first step of amortization schedule is to draw up the amortization but now I'm going to first calculate my present value of an annuit I'm given my p I need to calculate r and I have my interest I have my periods then I can just substitute so I've already identified everything I need I can substitute into the formula so like I said previously the i or the r r i interest same t n depending on which one they use in your book um t or n so yeah we're using n so our interest is 0.15 divided by two which is 0.075 0.075 and your n is three times two which is six so we just substitute into the formula and we calculate the period the payment and our payment it's 852 right now let's draw up the amortization because now we have the payment so we go we take the payment that we have we draw up our table and I complete all their periods remember I told you that the first step you do is draw up write the period the present value of the first one or the outstanding principle of the first one will be the present value that was given so there I write it down the next step is for me to complete the entire table with the payments because we did calculate the payment and I just calculate the payments or complete the payment and I calculate the total of those payments therefore it means I'm going to be making or uh five thousand one one three point zero eight payments okay for six years for the two years that or three years that we have because then those will be the payments okay now the next step is to calculate the interest that's the second one so our interest remember we use our interest we use the present value times the rate times the periods so it's four thousand times our rate is zero comma zero seven five times one always remember it will be t will be equals to one all their time and that will give us so the first thing we calculate is the interest so those are the formulas that are going to be using so we say four thousand times zero comma zero seven five times one oh come on I don't want to forget the whole table as yet and that should be equals to if you have a calculator I think it's 300 is my calculator not do you do do do what is the answer 300 is 300 right so we're going to write it here that will be 300 now to calculate the principal repeat we say 85218 minus 300 which will be equals to five five two point one eight that will be the answer five eight hundred and fifty two point one eight minus 300 will give us five hundred and fifty two point one eight now to get to the outstanding principal or the closing balance here we say four thousand minus so we say outstanding principal minus the principal repeat four thousand minus five five two point one eight we say four thousand minus five five two point one eight and it gives us three four four seven point eight two we need to go back and calculate the interest so calculating the interest yeah instead of using four thousand now we use three four four four seven point eight two and therefore we're going to get times point zero seven five times one and that gives us three five eight point five nine point five nine and to calculate the principal repeat we say eight five two minus two five minus two five eight point five nine and we get the principal repeat of five nine three point five nine and to get there for the for the next one we do the same three four four seven point eight two minus five nine three point five nine we write the answer there we calculate the interest and you can continue and continue and continue to complete the entire table and you will have all your various completed and you can add all your interest they will give you the total interest amount you paid for the duration of the period for those six half years and you will have the total in terms of your principal repeat which is the same the total should be the same as your opening balance at the beginning or it should be the same as your present value if you don't get the same when you add all of them then it means that you are doing something wrong okay so that is your amortization schedule what can you do with this amortization schedule so they will ask you a lot of questions for example they might ask you what is the payment or not the payment what is the interest amount you would pay after making three payments after i make three payments the interest that i would have paid would be that amount or they can ask you what is the closing balance after four payments after i make the four payments which is at that point what will be my closing balance because i made this payment my closing balance will be 1500 entage remember that so your closing balance will be the opening balance of the next line so after four payments because that will be my fourth payment my closing balance will be 1500 entage if they ask you what is your opening balance when you make four payments then your opening balance is 2260 so you can use this to answer the questions they might ask you what is the total amount of payment that you would have paid or what is the total interest you would have paid your total interest will be 1118 otherwise you can calculate your total interest so your total interest can also be your sum of all the payments which is 5113.08 minus your principal amount which is your principal value and that should also give you 11 113.08 that's all what they can ask you what is the total payments that you would have made or what is the future payment future value of this amortization amortized value then your future value will be 5000 113 that is if you're going to be calculating manual but that does not mean those with the financial calculators you cannot also understand this because sometimes i'm going to do that example yeah sometimes they can give you an amortization schedule and they might have blocked out this value and they call this value a and they might have blocked out this value sorry i can't see your screen i'm not sure what's going on i also don't know what went on and the screen is off when when was the screen off when you were trying to finish up on the on the last total interest on the total interest yes we are calculating the total interest oh okay and then the screen went blank oh sorry about that we can also catch up on it later on so i'm saying also if they give you an amortization schedule and they blank blanked out all these values and they say this is a and this is b you should be able to answer this question because you cannot answer a if you didn't answer b or let's say also this is blanked out let's assume that this is also blanked out because you can answer a even if you don't have b so let's say all these are blank out and they say it is a b c so in order for you to calculate b sorry a you need to calculate c in order for you to answer c you need to answer b so to answer b you need to know that it is your b b is p r t which will be 2216.12 multiplied by 0.075 multiplied by one that should give you the value of b which is 166.21 in order to answer a we need to answer b c and we know what c is c is 852.18 minus 166.21 and that will give you the answer that you are looking for which is 685.97 and then you can answer a and your a will be 2216.12 minus 685.97 and that should give you the answer of 153015 so regardless of whether you have a financial calculator you need to be able to know how to complete the amortization schedule finish in class let's move on to those with a financial calculator and see how we can help them to do the same oh this is what I was explaining right now but how do we do amortization schedule when we're using a financial calculator same question same same same the first needs to clear our calculator from any stored value so we need to also identify what it's given here so we are asked to draw up an amortization schedule so on a piece of paper you can draw up your table we know that this is our present value that is pv we know that this is our n we know that this is our i slash y and we know that it is compounded p slash y it is compounded of a which is 2 the first step that we need to do is to clear our calculator from any stored values and calculate the present value plus or minus also we do a second function p slash y we press 2 we go ent and that is your compounding period then you go on and off your calculator then we go plus or minus present value of 4000 which is our pv I forgot on this slide to have my pv that is your pv then we put three second function times p slash y which is three second function n and again and that is when we store the periods and we go 15 i and y to store the interest and we compute pmt so c o m p pmt and once we have our payment then we can amortize this value on your screen you will have your payment of 852.18 which is the same as what we had previously and you can draw up the schedule and you complete everything that everyone from the manual calculations also did we complete that and then we go and start to amortize the payment completing the table then we're going to amortize the payment to amortize your payment you press amort and press 1 so you will press a mrt and then press 1 to say I am now amortizing my first payment then you press down arrow and then press 1 and say I am confirming that I am amortizing my first payment and then you press enter and you press down arrow it should give you the balance which is your closing balance after payment number one which will be your opening balance line number two and payment number two the answer will be in the negative don't worry about the negative in front so you will just write 3447.82 and then you go press the down arrow it will give you the principal amount which will be the last color on your amortization schedule and then press the down arrow it will give you the interest so on your calculator it works different tool when you are calculating manual remember when we calculate in manual the first thing we do is calculating the payment which is similar then we calculate the interest here it gives you the balance before interest so do interest principal and then the balance so on your calculator it does things in reverse it goes interest principal it goes balance principal interest and then you press down arrow and now we want to amortize the second payment you press down arrow to enter down arrow to enter so you need to repeat the steps twice so that the first one says I am doing this the second one will say I am I am confirming that I am amortizing my second payment and then you will do the same repeat the steps so many times so you will press your down arrow and it will give you the balance of 285 down arrow it will give you your principal which will give you the principal of the first the second line down arrow it will give you the interest of the second line and you go down arrow three enter down arrow three enter and we are amortizing the third payment and it will give you your closing balance principal repeat of the third payment interest of the third payment and you continue like that down arrow down arrow down arrow until you are at the end and that's how easy it is to do amortization schedule on your calculator now let's look at what if they are asking you to do this on your calculator the same thing that we did with the previous one so you are using your financial calculator right you are giving the statement which looks like this that says draw up an amortization schedule of these but they asking you what is the payment what is the principal balance after five payments uh after four payments right what is the outstanding principal after four payments the first thing you need to do in everything is to calculate your payments first so you will go and follow the step second function c a second function p and y to e and t on and off your calculator plus or minus you put in the four thousand uh and you say it's the present value you go 15 which is i and y three second function and and again which is the period and then you say comp pmt and it gives you the payment and then you go and press amort so you will start with the amort nicely and then you say one remember we're looking for op after four payments right so we say amort one down arrow one e and t and without even looking at the values you just press down arrow down arrow down arrow once it gets to interest on your down arrow then you press down arrow instead of going to two you don't do two you say four e and t and you say down arrow four e and t and you go down arrow it will give you the answer you are looking for those who are calculating manually they have to do the whole table up until they get to four in order for them to get to a so they will have to complete all these values all of them all of them before they get to four on your financial calculator you do not have to you need to calculate your payment you calculate your first amortization your first payment you need to amortize your first payment before you can answer any of the other questions and if they asked you what is the what is the payment no the interest what will be the interest that you would have paid after four payments and that will be seen so you will just press down arrow and then down arrow again and that will give you your pay your interest remember this is your principal repeat and the next one will be your payment your interest and if they ask you what is their total payments you have your payment you can just add them all up or you can go back and put um if they ask you what is your total payment on your calculator you have your payment so you can go and say uh comp again you can go back to comp and say p m t again and it will give you the payment and then multiply that payment by six and that will give you six uh five one one three if they say what is your total interest that you cannot do unless if you have the entire schedule but you can calculate what your total interest is because if you calculated your total payments which will be five thousand you can just subtract four thousand and that will give you your total payment easy easy easy easy easy easy so let's look at more exercises do you have any question before we move to the exercises hi Lizzie yes yes um i wanted to find out quickly before we do when using the calculator before we we can do anything do we uh calculate the payment that's the first thing when we work with amortization you will realize as well when you answer your assignment questions or your exam questions the first question that they will ask you on amortization will be payment we'll look at that some of the examples how the questions follow each other okay and what you need to look up for so but the first thing that they will ask you when you're doing amortization is calculate or how um what will be the payment the minimum payment or the amount of payments that they need to make that is your um your your first question then the second question might ask you what is the outstanding balance after five years that's the other thing that is very tricky with the questions so for example if they say what is the payment after two years remember there it said three years if they say two years this is not two years that is still one year remember a year is made up of two halves so two payments will be done in one year so you need to be aware of that that this is three years because we're making two payments every year so if they ask you what is the outstanding principal after two years not for payments after two years after two years what is the opening principal after two years which is the same as after payment number four right so you need to be aware of those scenarios when they ask you questions like that so let's look at examples let's go and look at more exercises so here we can work together those with a calculator and those without a calculator we need to be on the same page to see are there any questions on the chat is there anyone who's asking a question no questions please make sure that you complete the register i'm just going to post it again on the chat before you leave today make sure that you have completed that register okay so let's go to our exercise a farmer needs 250 000 to purchase a 10 ton trailer the bank approves the loan for the full amount the interest rate is 18 percent per annum or per year compounded monthly and the loan has to be paid off in five years time determine the farmer's minimum monthly salary so this might be question number 22 on your exam usually amortization are your last questions in the on the exam paper so this is question number 22 so it means question 23 24 and 25 might be related to the same statement that we are reading so the first question asked determine the farmer's minimum monthly payment so what are we given the present value so we're going to start with those who have late in manual right present value which is p and we know that the bank approves all the full amount so its p is 250 our interest i is 0 comma 18 and we know that it is compounded monthly what is compounded monthly how many there will be 12 compounding periods there will be 12 so it means our interest we will have to go and divide it by 12 and the loan has to be paid in five years time so which is our n which will be five times 12 therefore it is 60 and what is 0 comma 18 divide 0 comma 18 point 18 divide by 12 divide by 12 which is 0 comma 0 0 comma 0 1 5 that is our interest so those who are calculating manually then you will use your formula i'm not going to write the actual formula as it appears but i'm going to write the formula s r is equals to your p divide by the accumulation factor so that it's easy for you to substitute into that formula 1 plus i to the power n minus 1 divide by i times 1 plus i to the power n so we just substitute into this formula our principal or present value is 2 500 000 divide by everything in the accumulation factor will be 1 plus 0.015 to the power 60 minus 1 divide by 0 comma 015 times 1 plus 0 comma 015 to the power 60 and you can calculate and give me the answer later on those who are using financial calculator we do the same remember the steps are always the same i'm gonna change or not let me not change the the test i'm going to use the same pen so remember the steps are the same present value is our pv interest is our i slash y compounding periods they are 12 and n is five remember we keep the values as they are and n is five we don't multiply by 12 so you go second function ca second function p slash y which is on top of i and y put in the compounding periods and then press ent go on and off your calculator plus or minus put in the value of the present value and and then press present value then we go what is the value of our interest put it in the right place what is the value of our period second function and you know me i'm lazy to type i'm just gonna press n n again so you press n twice in this instance which is times p y which we multiply with the compounding periods and then we're going to say c o m p p m t so are you done let's do the calculations then you can give me the answer when you are done okay you must write your answer in the chat and if everyone agrees with your answer you know what we do usually we like we thumb i what do you call that thumb what thumb like we live it we laugh at it or we are surprised by it or we are sad but we never become angry so you can use any of those emojis like love like love love heart heart it laugh at it i'm not sure even laughing at it will be a good idea surprised by it sad by it but never angry so if you agree with mildreds let's see how many people we've got about 20 got about 24 people on here so they should be at least different answers different emojis if possible give us what you have in front of you hi bo something is weird somebody's answering with my name and i haven't answered who is you who's answering with your name mildred m it's me but the person is already no they are coming threads sorry there is oh mildred antebola is the one who's answering and then we have uh qmi guest huh that's very nice we have a guest so come come come come so we have i'm gonna say seven half we are not even half of the people who are here i want everyone to give their opinion on the answer so i'm gonna take it some of you don't know how to answer it because if you are not liking the answer or commenting or giving us your own answer it means you haven't calculated it so it's fine let's answer the question so what is those who are who calculated manual probably you had the same answer as those who calculated using a financial calculator so those who use the financial calculator i'm gonna ask you first what are the values that i need to put in the blocks to see that you did the right thing so second function py what was the value that you put in here okay plus or minus 250 000 and i and y 18 and your periods that will be five and when you press c o m p p m t and the answer will be equals to option four six thousand three hundred and forty eight and once you have that answer you don't remove anything from your calculator you hold on you don't delete you don't do anything you just leave the answer as is and look at it those who are calculating manually you would also have gotten the answer of six thousand three hundred and forty eight point three six now you will have to do some work because you don't have all the answers the second question says refers to farmer's question number one which means in your exam paper you are referring to question number 22 so now you are in question number 23 it says refers to question number 22 what will the outstanding balance of the farmer's loan be at the end of third year right third yeah those with financial calculator it will be easy i'm going to come back to you those without financial calculators therefore it means you will have to go and draw up an amortization schedule somewhere either in excel or somewhere so you will have your period your opening balance your interest i'm just going to put the i for interest not i i i is for interest and p m t for payment and pr for principal repage right you go in to say because the let's go back to our question number 22 so question 22 was 60 right and it's monthly so one two three four five six seven eight nine ten up until 60 your payment you calculated it and it was 6348 6348 point what was the point 36 and your opening balance was 250 000 right you need to calculate your interest by saying 250 times what was our interest 0 comma 015 so to calculate this value you will say 250 000 times 0 comma 015 times 1 it should give you your interest here to calculate this value here you will say 648 minus the let's make it the question mark to calculate the question mark so this is to calculate the point right to calculate the question mark you will say p m t minus the point which is that that answer that you have there and you will have to do the same so let's go to this one i will make it the block to calculate the block to calculate the block you will say 250 000 minus the question mark and that will give you your thing and then you go back calculate the point by using the value there by calculating there because this payment will stay the same for all the years to calculate the question mark and then calculate this and until you get to the third year you know where is the third year it's monthly so there should be 12 rows of this and you should also have calculated another 12 rows because this is year one year two and the third year will be after 12 36 so somewhere here there will be 36 that will be the last that you are calculating 36 what is the outstanding balance on the farmer's loan at the end of third year year one is made up of 12 months year two is made up of 12 months year three is made up of 12 months so at the end of year three which is the third year will be at the end of 36 so you will have to complete this 36 times in order to get the video now right i'm done with you so because you've got all the time until the session is over to complete the amortization schedule so it means in the exam you will not be able to answer that question as quickly as possible so those with a financial calculator here is the thing you will say second function c or you have already the amortized the the value we need to amortize the payment so you still have your payment if you remove your payment just go back and say comp p empty and your payment should still appear on your calculate once you have that payment then you press amort a m r t you press one press down arrow down a you press amort one and you press down arrow one and then you press e and t then you're going to press down arrow down arrow you're going to press it twice three times because the first one it will give you the balance the principal repeat and it will give you your interest and you will get to down arrow now it says at the end of the third year three times 12 is 36 at the end of third year it's after 36 payments so you're going to press down arrow 36 e and t then arrow 36 e and t down arrow and it will say the balance and that is the answer we are looking for and what do we have let's see how many answers no answer no answer i got option three hundred and twenty seven so the answer will be hundred and twenty seven thousand one hundred and sixty point one six those who are using the manual calculator on the notes i'm going to stop sharing now i'm gonna stop sharing so that i can share my entire screen oh gosh now people are gonna see my whatsapp let me close my entire screen people are going to see because this is published i'm looking for so those i'm just gonna show you those who are calculating manually you just go to the scheduled link you go to open class folders there is a i've just placed the amortization hack thingy there which you can use so but you will have to change certain things on here enable you to use this as your calculator so i've just made it so let's go and see if i can get it to work the way it's supposed to interest is 18 and the number of years here you need to be very careful because i'm using already the compounded possibly let me just see the number of years if it's five and the compounding periods if they are 12 just want to see if i'm getting it right so you will have to use it that way and i'm just explaining that these three things are just calculations so the payment what i do here it is just this formula that i've calculated the top part of the formula calculates that the bottom part of the formula is this complex calculation that is happening there at the bottom can you see that um that's all what i'm doing but you can see that the payment you get the same as what you have when you calculate manually and the amortization schedule is completed now the challenge with this is it will not give you up until where you want because then there will be some other things that happens here at the bottom i've done it up to 60 so you can also fix it because it's just calculations on how you go and amend each one of them so i just did it up to 60 but after so it will give you the same answer so after 36 months or after 36 payments so you just go to 36 to 36 and we know that this is the 36 payment but what we're looking for it is the closing balance after we make this payment after we make 36 payment this is our 36 payment that will be our closing balance as you can see it answers the question that you were asked which is option number three okay so i've given you everything you need for now let's go and answer number three so 22 23 24 now we are at 24 and question 24 it says also refer back to the same question that you had previously now they're asking you how long will it take to pay off the loan if the farmer pays 7500 monthly into the account assuming that the interest stays the same now you panic don't panic because now they're asking you for the period how long will it take them we know what the loan is you know what the payment is right so we do have the payment we do have the present value we do have the interest we just don't know how long which is end we have the interest and we don't know the end so we don't panic only those who are going to calculate this manually might panic because you will have to use the formula and change so yeah you will say second function see sorry that's the other thing i need to say you don't have to change anything everything stays the same right on your question so because they are related the compounding periods are the same everything stays the same now the only thing that changes is the payment your present value still stays the same so you're going to press 7500 and then you're going to press PMT on your calculator these are financial calculate so you haven't cleared your calculator from anything after you calculated the previous question you still have all the values so you just press 7500 and you press PMT and then you go and press comp and you press end and when you press n it should give you a value in a compounded number so tell me what you see in front of you now i'm talking to those who are calculating using their financial calculator what is the value that you see don't look at the answers we're going to get there what value do you see if you cleared your calculator let me know that i've cleared my calculator then i will give you the steps in the meantime no i've also cleared my calculator okay so if you cleared your calculator still the same second function CA so we do the same second function CA second function p slash y and you press the 12 when you do ENT then you go on and off your calculator plus or minus one of them seven seven thousand five hundred or the two hundred and fifty thousand present value seven thousand five hundred PMT and our interest was 18 which is in y and you say comp and you press n those who are calculating manually gosh that is the very complex thing to do so our present value times our rate times one plus i to the power n minus one divide by n times one plus i to the power n now your challenge will be how do you use the log so now you will need to rewrite this which might not be as easy as i thought so let's see it will be p divided by r and you will have your one plus your i to the power n minus one divide by i times one plus i divide by n you will have to substitute the value so that you can you will need to make and the subject of the formula i will show you just now if we have time how to do that but i want those who are calculating yet to give me the answer what is the answer when you do this when you press comp and give me the value that you see in front of don't look at the answers because then you go in to say but i'm not getting the same answer that i'm seeing here don't worry about the answer that is on the board on the screen use me the answer that we see on your calculator 36.5 46.5 46.5 right so the answer you get is 46.5 now this says how long it they will take the to take to pay off the load but the answers on here are in years the answer you see here is the compounded answer of your periods already this answer is multiplied by the compounding periods all you need to do is divide this by the number of compounding periods we know that they were 12 because that's what we put there they were 12 so you just say 46.5 divide by 12 and then you will get the answer so you just need to pay attention to that so it is 3.9 so that is the answer you just need to make sure that you pay attention to the option given are they giving it to you in months because if it's compounded monthly it should be in months if it's compounded quarterly if they give you in quarters then you know that it is in quarters the answer you get will be in quarters but if it's in years then you need to make sure that you divide the answer you get for n divided by the compounding periods and this happens when you do any questions relating to compounded interest annuities and amortization every question where they ask you to find the value of n or the how long you answer the question of how long always remember if it was compounded only for yearly if it's compounded yearly therefore the answer you get is in years then the answer will be in years so you just need to check if there are no disconnection between the two those who are calculating manually you need to make sure that n is your subject of the formula and that might take long because at the end of the day you will have to use the log to manipulate this entire equation so that n is the log n is the subject of the formula so it means you will have to use the logarithm function okay that is the only question that you might it might take you long if if not you might not calculate it in the example if you are going to sacrifice at least one question that you are not going to answer but in terms of amortization the others should be fine because you have the table okay so this is another example I just want to check what type is it because we left with seven minutes so this is another example of amortization now you need to pay attention guys when you get closer to the end of your your exam paper especially the last three or four questions of the exam paper they are about amortization therefore all those questions are related to one another don't be quick to clear your calculator before you finish your exam and question that is related to amortization there will be three or four questions related to that make sure that when you move to the next question it's not related to that question before you clear your calculator pay attention to that so exercise four it says Justin here bought the three house bedroom for 480 he paid the deposit of 150 so therefore it means the amount now reduced and he secured the loan for the outstanding amount the yearly interest rate on the loan at that stage was 24 percent and it was compounded monthly and the time of the loan was 20 years determined just in minimum payment so we know that our present value will be 480 000 minus 150 000 that will be your present value we know that our interest will be 0 comma 24 and you need to divide that by the compounding periods they are 12 the year or periods they are 20 and you will need to multiply that by 12 so let's go to our sheet so that we can complete this oh it closed okay i can go and open it again they didn't realize that i closed it oh i didn't close it still yet so we're gonna go i'm gonna use the same so i'm gonna say it's 480 000 because i can then minus and now it means it changes your your sheet because i'm working on online 480 minus 150 000 let's see if this is 450 yes and we know that our interest was 24 and the number of years they were 20 and it is compounded monthly which is 12 so this i have my compounding period and i've calculated my payment is 660 6657 let's see and that is option number one easy net otherwise you go and do second function c a second function p slash y they are 12 e and t on and off your calculator plus or minus 330 000 that is our present value we go and put 20 second function and and again and 24 that is my interest and i go comp and that will be comp p m t and that will give me my payment now i need to answer the second question i don't clear my calculator go to the next question and it says relating to the previous question determine the outstanding amount at the end of 10 years 10 years compounded monthly how many payments will that be so you just need to say 10 times 12 and that should give you your your next payment so how many are they 120 payments unfortunately oh unfortunately on our sheet remember our sheet does not have 120 so you will have to work on that sheet because it ends on 260 and not up until 120 so i can just continue i'm not sure if i can add more columns on this but since it's online i don't know how to do that online okay let's see if if it was still work still works so you will have to add more columns insert rows can insert as many as i want and then i can drag this so that the number here gets 220 because that's what i need still i'm still on 115 so i must still add more insert and you just go to the top three because i need to keep the same calculations and formulas and you just drag and my 120 there it is so what is the balance after 120 so that is 120 that is my payment at 120 therefore this is my answer that i'm looking for which is 301951 which is option number three and that's how easy it is otherwise those who are using financial calculator after you have your payment remember you did the comp pmt you wait there and you just say amrt1 and then you go down arrow 1 ent down arrow down arrow you just even ignore all that because until you get to interest there you go down arrow and you press 120 ent down arrow 120 ent and down arrow and it will show you balance and that is the answer that you are looking for that's how easy it is to do amortization the next question also it relates to the same so please don't clear your calculators you have your payments all you just need to do you read the question it says suppose he has to pay 8 000 per month into the loan account from the start how long will it take we still back to that how long so everything stays the same how long if i change you just press 8 000 and you press pmt it will overwrite the original payment that you have and then you just press comp n and it is in years you divide that by the compounding periods and you can get your answer straightforward if you cleared your calculator if you cleared your calculator then you're going to use second function ea second function p slash y 12 ent on and off your calculator plus or minus now i'm gonna put the 8 000 because it doesn't really matter any one of them can have a plus or minus but only one of them plus or minus 8 000 and 330 000 that is our present value and our interest was 24 and that was i and y and we just need to comp and and when you get that we divide it by 12 what is the answer and that will continue today's session have you calculated the answer i'm still calculating okay so those those who are calculating manually i'm gonna show you now so remember this is the formula so what i can ask you to do is copy this formula only the formula not not the equal side copy that paste it somewhere and please download don't do anything to this you must download it onto your machine right because if you make any changes to this sheet you're changing it for everyone so don't work online so you copy it and you paste it somewhere and then you come in here and you type 8 000 and you press equal and it will change everything and probably it will tell you when you will have paid everything up let's see when we get a 0 there 89 so you take 89 and you divide or is it 90 it might be 90 not 89 89 divide by 2 so let's see equals 89 divide by 12 7.4 so it is 90 actually sorry let's see 90 because i haven't calculated it i'm just no which one will be the last one is it 89 or 88 when you use your calculator what do you get i think it's 88 probably you do get 88 what do you get just 88.02 88.02 right and if you divide 88.02 by by 12 you should have 7.3 which is the answer that i get there because there's no payment here it will actually end on there on 88 because this is negative on this side so that will be 88 so you just go and look at the last way before you get to the negative but probably you need to use your calculators and that concludes today's session because then i am way out over type this is another question that you might get in the exam that looks like this and it says first uh find the size of the three monthly payment then consider amortizing the that payment and find the total interest yeah it's very interesting it says find the total interest charged over the first year of repayments reading the question you should be able to it says quarterly so there will be four payments made per year and this is for how long so there will be just only four payments made so you can calculate those and calculate the interest charged over those four first year repayments because they are just four so you can do that you can calculate them okay and that concludes today's session which the next session i see you will be on the day tf i hope you have enjoyed the session and and good luck with all your work so let's just recap and finish off the session for today uh by the end of the session you have learned how to calculate the payment of an annual of an amortization note and you have you now know how to to set up an amortization schedule you need to practice guys practice practice practice practice practice you cannot just come yet today and then wait until you go write the exam and then start practicing a day before you go write the exam using your financial calculator requires you to practice finding more questions and doing the exercise if you are stuck or you don't know what is happening feel free to send an email feel free to ask on whatsapp i might not be the only person you can rely on there are so many other people out there giving assistance in terms of qmi you can ask them don't wait until it's too late and start painting ask go through the work this is meds we need to practice the more you practice the more you get better edit don't be shy okay so conclusion are there any questions any comments are you still good are you happy talk to me before we end the session those who haven't completed the register please make sure that you complete the register yes build that my tabula since there are two build rates in this room i know we yes we we we received a number of session so far i might say this was a tricky one this amortization but uh with your assistance uh at least now we can say that i will be able to answer it uh yeah the only thing i can say thank you for your sessions uh helping me a lot thank you thank you no problem uh build that my table you have your hand up i thought you went to ask your question okay good evening everyone evening i just want to know where can i access this okay so um i don't know how you accessed the session for today i'm gonna go back to the thing here to share i just need to this discount that um i don't know how you accessed the session for today but there is a schedule that unisa paro shares with the students if you go to that schedule and you look for your for this topic which is basic numeracy skills and you look for my name but you might find me in different places you just need to make sure that it's linked to your module there is the join session where you join all the sessions and then underneath it there is the notes and recordings that's why i went to show you where to open the notes the notes are under that if you click on it it will open the notes for you i've got all the notes for all the sessions that we have and underneath the open notes and class open class notes folder there is the recorded sessions they they are all of except there is one missing i've just realized that so this is where you will find the recording it will be loaded here but it takes time it takes about they said is it 62 hours to 72 hours i can't even remember but it takes time uh to get the the the recordings loaded and that is reasonable because there are so many other sessions that are happening on the same day as you can see there they are about one two three four five six more sessions that were happening today so they will need to make sure that they download them clean them up upload them then share them on this site so it takes time all right i'm gonna stop presenting and stop sharing and i can say to you guys thank you for coming and i will see you on the 30th okay so the other thing wait let me check what is the recording stop


Bonjour et bienvenue, this is La Madalise and welcome back again to my channel. I am thrilled to be back after a two month long hiatus. Taking breaks is very important for me and for my mental health but now I am really really excited to be back and to give you guys a new tutorial. In today's tutorial, we are going to learn how to draft the basic torso foundation. For those who are new to my channel, I have previously created videos on drafting a basic torso block. However, this method is the one I always use for my garments and it's time to share it with all of you. And by the way, I've also created a woman's measurements chart on Google Sheets and you can find the link in the description box below. And do not forget to make a copy of the file for your own reference and so that you can use this chart for your own measurements or even for your client's measurements. Anyway, let's get started.


I'm here at the Canada-Korea Natural Gas Forum. The reason this is important is because natural gas from British Columbia represents a trillion dollar opportunity. It's going to it could transform our province just the way that WAC Bennett's investment in the dams changed British Columbia forever. And the best thing about it is natural gas is the cleanest burning fossil fuel. We've been extracting it for 50 years in British Columbia and we do it better more safely and in a more environmentally sound way than anybody else in the world.


I see a large over bin. Good morning, mine explorers. Good morning. Tom and Julie here. We're out and about again. Looks like we have a mine in front of us. We're walking down a rail bed. Either went between a couple of the workings up here or might have been a narrow gauge that went all the way down and hooked up with a bigger trail track somewhere else. That's what I think it is. So I see a couple of waste piles ahead of us. Let's go further up here and see what's up. This is up above the ore bin. There must have been a trestle that ran over to the to the bin to dump the ore in. Pretty good wall of rock right there too. Behind us is a huge rock wall. I don't know what's going on up there. We better go find out. See if we can decipher what's been done up here. Well, this is the view from a little higher up. There's a large equipment pad over there and several openings here. And also this area has been stripped out a little bit. I guess we have to go a little closer. Okay, let's go and look in one of these openings and see what we have. This mine was started in 1913. It's a gold mine. And it looks like it's been stripped out some since then. There's a big room here. Look at all the shoring over there. Let's go look over this way. It's hard because your eyes don't adjust very quickly, do they? Look at the nest. Alright, that's wandered on into this stope and see what's going on. What do you see down here? The shaft? Oh, that's why that hoist was out there. I can't see the bottom. There's a nest up there. You do have to watch your step with some of these pits around here and shafts. A bit of vein above you.  You don't slide in there, do you? Actually, that turns turns into a little flatter angle. It goes straight for about 30 feet, 25 feet. That flattens on. Let's see what's over this way. Real maze of workings, isn't it? It's different than most of the mines we see, isn't it? Oh, look over here. There's a big killer. We can go a little further down on that stope. Let's look over here first, though. What did you see down here? It's looking straight up. So sure is an interesting looking area, isn't it? I'll do the slow pan across here. All right, let's enter this stope. It's a fairly shallow angle, so not real hard to navigate it. I don't know what you're gonna find. No, you gotta watch out. You're falling on these holes. You don't really want to do that. Another big pillar right there. Here's some track. Ladder? Did somebody say ladder? It's a ladder, but there must be a little something going on down below us here. We could try and call down there. I'm a little wounded still, but let's go this way and follow the tracks for a minute. See what happens. I think we better go up here, don't ya? Here's the beginning and end of the tracks. And it looks like it dumps down into a bore chute or a pass of some sort. I see a wooden chute down there. Well, let's follow the tracks and see what happens. Fairly large stope. Taking a hard left. There's parts of a downway box. Tracks go that way for a way. What's happening this way? Let's take this right. Let me know what happens up there. Please. Keep going. I'm coming. Here's a big hanger peg. Here's some large water pipe.  Oh yeah, there's another up working. We had their stoper drill out for that. You can see the drill holes going straight up. Okay, we're back out of that area. Let's follow the tracks more. There is a big stope up here too. I don't see the obvious vein here, really. At least not a major one. Apparently there was, though. Somebody's been doing some burning. For some reason. Oops. I was trying to be so quiet. Looks like we're coming to an end. A period end. Never know, though. Here's somebody from 1957. Our Montfred. Montfred. Here's a ladder going up, only part way. I'm sure I just tried to burn this mine up, haven't I? There's fires all over the place. Okay, well, let's get back out of here. Here's Montfred again. I'm up in a stope here. This is that burned area where that ladder was down below. We just saw. It's down there. This is the end of the stope. You can see it's kind of suited out up here. Julie, stay down there. We'll try to give you some scale of this stope. There she is. Now you can see how how big that is. Okay, you can see how far away Julia is over there. That's looking across about half of this stope, because I've already come through the half behind me. Okay, that's where I just came from. We're back to the track area. I guess this is the main, that big, flat hanging wall. I guess it would be. Interesting mine. I'm wondering if there's another entrance below here for a haulage, because where would they haul this out to? This is back to that chute. All right, Julie's going to brave this little area here. I could go down there, but I'm a little dinged up. Plus, I just took a nice spill. Ain't easy getting old, is it? Is your hair going through there? Yeah, it's going in. I can't see much. I can see the ground right there. Yeah, but you won't be able to get back up. I think so. We can sit in the ladder down there. Shoot where? It is? All right, I'll be down. Tom's going to come down the chute that I just came down. A little birdie buck at it. Dust on in. All right. We slid down that chute. I tried to get away from the dust over here, but I didn't really get far. So it doesn't go too far to the left as we came down. It comes to this big chute and stops. And this goes back up where we came from before. This is back where we came from. We came down this chute right here. So we're in a little lower stop level. That's to the right. This is to the left. This is straight. Well, where do you want to go? That has an arrow like it's going to go out. Let's go look at the ladder real quick. Boy, is it powdery down here? Yeah. That just ends right there. Another chute coming up. That is plug solid. What do you see there? It goes to a chute and it ends. I'll come and take a shot of it. This is back to another chute. This is one I think we looked down. And I'm up above. So we haven't been that way yet. Let's go this way. Another big chute here. Number eight or number one, depending on which area you are in. Real stoke maze, isn't it? Yeah. Here's some groundfall. Just a little pocket on the right here. Kind of a spidery web vein here, isn't it? Okay, we initially came from that way. This will be taken a right. Okay, let's take the right here again. That was a right on the right. Here's your million-dollar pair of jeans. Here's the honey pot. Nope, just a fuel can. And the face of a drift. What did you find? Okay, we're backtracking. This is where we came from. Up that way. See where this goes. Okay. I think we found another way out of here. Rather than going back up that chute. And now we're back up to the level we started on. There's your ladder over there. There's your ladder over there. As usual, we do stuff the hard way the first time. Well, it's been an interesting explorer, hasn't it? Yeah, unusual. Different than a lot of the ones we see more stoping. All right, let's check this out. I just crawled through that little hole. I told Tom I'd look at it first before he came through here. Just goes a little ways and it ends. A little timbering. Not much, though. So not worth it for him to come through. Which you never know. All right, I'm going to head back. That looks like it was a post for an anvil. Maybe this was the blacksmith's shop. Look at the beautiful asters. Purple asters. Look at those. Wow. Pretty, huh? A lot of yellow flowers out now, too. And action! Thanks for watching the video today, you guys. I hope you enjoyed it, and we'll see you on our next adventure. All right, thank you, Julie.