CALCULATOR HINTS ANNUITIES


 Oswin Stokes
 6 years ago
 Views:
Transcription
1 CALCULATOR HINTS ANNUITIES
2 CALCULATING ANNUITIES WITH THE FINANCE APP: Select APPS and then press ENTER to open the Finance application. SELECT 1: TVM Solver The TVM Solver displays the timevalueofmoney (TVM) variables.
3 CALCULATING ANNUITIES WITH THE FINANCE APP: The TVM Solver displays the timevalueofmoney (TVM) variables. Enter all known information: You should have values for four of the five Finance variables and the 3 fixed values. Variables: N = number of payment periods I% = annual interest rate PV = present value PMT = payment amount FV = future value Fixed Values: P/Y = number of payment periods per year C/Y = number of compounding periods per year in the same transaction PMT: END BEGIN designates the payment method
4 EXAMPLE 1: Art Dull recently set up a TDA to save for his retirement. He arranged to have $50 taken out of each of his biweekly checks; it will earn 9 ¼ % interest. He just had his 30 th birthday, and his ordinary annuity comes to term when he is 65. Determine the following: a. The future value of the account b. Art s total contribution to the account c. The total interest
5 EXAMPLE 1: Art Dull recently set up a TDA to save for his retirement. He arranged to have $50 taken out of each of his biweekly checks; it will earn 9 ¼ % interest. He just had his 30 th birthday, and his ordinary annuity comes to term when he is 65. Determine: a. The future value of the account b. Art s total contribution to the account c. The total interest a. Enter known values. N = 26 * 35 (number of biweekly periods per year) * (number of years).
6 EXAMPLE 1: Art Dull recently set up a TDA to save for his retirement. He arranged to have $50 taken out of each of his biweekly checks; it will earn 9 ¼ % interest. He just had his 30 th birthday, and his ordinary annuity comes to term when he is 65. Determine: a. The future value of the account b. Art s total contribution to the account c. The total interest a. Enter known values. Solve for FV.
7 EXAMPLE 1: Art Dull recently set up a TDA to save for his retirement. He arranged to have $50 taken out of each of his biweekly checks; it will earn 9 ¼ % interest. He just had his 30 th birthday, and his ordinary annuity comes to term when he is 65. Determine: a. The future value of the account b. Art s total contribution to the account c. The total interest b. On the Home Screen, c. Calculate total contribution = total interest = n(pymts) * pymt. FV total contribution.
8 EXAMPLE 2: Determine the monthly payment into an ordinary annuity earning 8 7 / 8 % interest for a term of twenty years that will yield a future value of $45,000. Enter known values. Solve for PMT.
9 EXAMPLE 3: In June 2007, Manuel set up a TDA to save for retirement. He agreed to have $175 deducted from each of his monthly paychecks. The annuity s interest rate was allowed to change once each year. a. In 2007, the interest rate was 5.25%. Determine the account balance in June b. In 2008, the interest rate was 3.8%. Determine the account balance in June To do this, think of the June 2008 account balance as a lump sum that earns compound interest. c. In 2009, the interest rate was 2.2%. Determine the account balance in June 2010.
10 EXAMPLE 3: In June 2007, Manuel set up a TDA to save for retirement. He agreed to have $175 deducted from each of his monthly paychecks. The annuity s interest rate was allowed to change once each year. a. In 2007, the interest rate was 5.25%. Determine the account balance in June a. Enter known values. Solve for FV.
11 EXAMPLE 3: In June 2007, Manuel set up a TDA to save for retirement. He agreed to have $175 deducted from each of his monthly paychecks. The annuity s interest rate was allowed to change once each year. b. In 2008, the interest rate was 3.8%. Determine the account balance in June To do this, think of the June 2008 account balance as a lump sum that earns compound interest. b. Enter previous FV value Solve for FV. into PV (with a negative sign). Change the interest rate.
12 EXAMPLE 3: In June 2007, Manuel set up a TDA to save for retirement. He agreed to have $175 deducted from each of his monthly paychecks. The annuity s interest rate was allowed to change once each year. c. In 2009, the interest rate was 2.2%. Determine the account balance in June c. Enter previous FV value Solve for FV. into PV (with a negative sign). Change the interest rate.
first complete "prior knowlegde"  to refresh knowledge of Simple and Compound Interest.
ORDINARY SIMPLE ANNUITIES first complete "prior knowlegde"  to refresh knowledge of Simple and Compound Interest. LESSON OBJECTIVES: students will learn how to determine the Accumulated Value of Regular
More informationTHE VALUE OF MONEY PROBLEM #3: ANNUITY. Professor Peter Harris Mathematics by Dr. Sharon Petrushka. Introduction
THE VALUE OF MONEY PROBLEM #3: ANNUITY Professor Peter Harris Mathematics by Dr. Sharon Petrushka Introduction Earlier, we explained how to calculate the future value of a single sum placed on deposit
More informationThe values in the TVM Solver are quantities involved in compound interest and annuities.
Texas Instruments Graphing Calculators have a built in app that may be used to compute quantities involved in compound interest, annuities, and amortization. For the examples below, we ll utilize the screens
More informationTIME VALUE OF MONEY PROBLEM #4: PRESENT VALUE OF AN ANNUITY
TIME VALUE OF MONEY PROBLEM #4: PRESENT VALUE OF AN ANNUITY Professor Peter Harris Mathematics by Dr. Sharon Petrushka Introduction In this assignment we will discuss how to calculate the Present Value
More informationMain TVM functions of a BAII Plus Financial Calculator
Main TVM functions of a BAII Plus Financial Calculator The BAII Plus calculator can be used to perform calculations for problems involving compound interest and different types of annuities. (Note: there
More informationFinance Notes ANNUITIES
Annuities Page 1 of 8 ANNUITIES Objectives: After completing this section, you should be able to do the following: Calculate the future value of an ordinary annuity. Calculate the amount of interest earned
More informationReview Page 468 #1,3,5,7,9,10
MAP4C Financial Student Checklist Topic/Goal Task Prerequisite Skills Simple & Compound Interest Video Lesson Part Video Lesson Part Worksheet (pages) Present Value Goal: I will use the present value formula
More informationProblem Set: Annuities and Perpetuities (Solutions Below)
Problem Set: Annuities and Perpetuities (Solutions Below) 1. If you plan to save $300 annually for 10 years and the discount rate is 15%, what is the future value? 2. If you want to buy a boat in 6 years
More informationUsing the Finance Menu of the TI83/84/Plus calculators KEY
Using the Finance Menu of the TI83/84/Plus calculators KEY To get to the FINANCE menu On the TI83 press 2 nd x 1 On the TI83, TI83 Plus, TI84, or TI84 Plus press APPS and then select 1:FINANCE The
More informationSection 5.1  Compound Interest
Section 5.1  Compound Interest Simple Interest Formulas If I denotes the interest on a principal P (in dollars) at an interest rate of r (as a decimal) per year for t years, then we have: Interest: Accumulated
More informationChapter F: Finance. Section F.1F.4
Chapter F: Finance Section F.1F.4 F.1 Simple Interest Suppose a sum of money P, called the principal or present value, is invested for t years at an annual simple interest rate of r, where r is given
More informationActivity 3.1 Annuities & Installment Payments
Activity 3.1 Annuities & Installment Payments A Tale of Twins Amy and Amanda are identical twins at least in their external appearance. They have very different investment plans to provide for their retirement.
More information1. Annuity a sequence of payments, each made at equally spaced time intervals.
Ordinary Annuities (Young: 6.2) In this Lecture: 1. More Terminology 2. Future Value of an Ordinary Annuity 3. The Ordinary Annuity Formula (Optional) 4. Present Value of an Ordinary Annuity More Terminology
More informationValue of Money Concept$
Value of Money Concept$ Time, not timing is the key to investing 2 Introduction Time Value of Money Application of TVM in financial planning :  determine capital needs for retirement plan  determine
More informationStats & Discrete Math Annuities Notes
Stats & Discrete Math Annuities Notes Many people have long term financial goals and limited means with which to accomplish them. Your goal might be to save $3,000 over the next four years for your college
More informationIn Section 5.3, we ll modify the worksheet shown above. This will allow us to use Excel to calculate the different amounts in the annuity formula,
Excel has several built in functions for working with compound interest and annuities. To use these functions, we ll start with a standard Excel worksheet. This worksheet contains the variables used throughout
More informationChapter The Time Value of Money
Chapter The Time Value of Money PPT 92 Chapter 9  Outline Time Value of Money Future Value and Present Value Annuities TimeValueofMoney Formulas Adjusting for NonAnnual Compounding Compound Interest
More informationSolutions to Time value of money practice problems
Solutions to Time value of money practice problems Prepared by Pamela Peterson Drake 1. What is the balance in an account at the end of 10 years if $2,500 is deposited today and the account earns 4% interest,
More informationSample problems from Chapter 10.1
Sample problems from Chapter 10.1 This is the annuities sinking funds formula. This formula is used in most cases for annuities. The payments for this formula are made at the end of a period. Your book
More informationWeek in Review #10. Section 5.2 and 5.3: Annuities, Sinking Funds, and Amortization
WIR Math 141copyright Joe Kahlig, 10B Page 1 Week in Review #10 Section 5.2 and 5.3: Annuities, Sinking Funds, and Amortization an annuity is a sequence of payments made at a regular time intervals. For
More informationTime Value of Money, Part 5 Present Value aueof An Annuity. Learning Outcomes. Present Value
Time Value of Money, Part 5 Present Value aueof An Annuity Intermediate Accounting II Dr. Chula King 1 Learning Outcomes The concept of present value Present value of an annuity Ordinary annuity versus
More informationBEST INTEREST RATE. To convert a nominal rate to an effective rate, press
FINANCIAL COMPUTATIONS George A. Jahn Chairman, Dept. of Mathematics Palm Beach Community College Palm Beach Gardens Location http://www.pbcc.edu/faculty/jahng/ The TI83 Plus and TI84 Plus have a wonderful
More information1. % of workers age 55 and up have saved less than $50,000 for retirement (not including the value of a primary residence).
Toward Quantitative Literacy: Interesting Problems in Finance 2008 AMATYC Conference, Washington, D.C., Saturday, November 22, 2008 http://www.delta.edu/jaham Fill in the blanks. 1. % of workers age 55
More informationTIME VALUE OF MONEY #6: TREASURY BOND. Professor Peter Harris Mathematics by Dr. Sharon Petrushka. Introduction
TIME VALUE OF MONEY #6: TREASURY BOND Professor Peter Harris Mathematics by Dr. Sharon Petrushka Introduction This problem assumes that you have mastered problems 15, which are prerequisites. In this
More informationKey Concepts and Skills
McGrawHill/Irwin Copyright 2014 by the McGrawHill Companies, Inc. All rights reserved. Key Concepts and Skills Be able to compute: The future value of an investment made today The present value of cash
More informationTVM Appendix B: Using the TI83/84. Time Value of Money Problems on a Texas Instruments TI83 1
Before you start: Time Value of Money Problems on a Texas Instruments TI83 1 To calculate problems on a TI83, you have to go into the applications menu, the blue APPS key on the calculator. Several applications
More informationANNUITIES. Ordinary Simple Annuities
An annuity is a series of payments or withdrawals. ANNUITIES An Annuity can be either Simple or General Simple Annuities  Compounding periods and payment periods coincide. General Annuities  Compounding
More informationChapter 2 Applying Time Value Concepts
Chapter 2 Applying Time Value Concepts Chapter Overview Albert Einstein, the renowned physicist whose theories of relativity formed the theoretical base for the utilization of atomic energy, called the
More informationCh. Ch. 5 Discounted Cash Flows & Valuation In Chapter 5,
Ch. 5 Discounted Cash Flows & Valuation In Chapter 5, we found the PV & FV of single cash flowseither payments or receipts. In this chapter, we will do the same for multiple cash flows. 2 Multiple Cash
More informationRegular Annuities: Determining Present Value
8.6 Regular Annuities: Determining Present Value GOAL Find the present value when payments or deposits are made at regular intervals. LEARN ABOUT the Math Harry has money in an account that pays 9%/a compounded
More informationUnit VI. Complete the table based on the following information:
Aqr Review Unit VI Name 1. You have just finished medical school and you have been offered two jobs at a local hospital. The first one is a physical therapist for the hospital with a salary of $45,500.
More informationChapter 4. The Time Value of Money
Chapter 4 The Time Value of Money 1 Learning Outcomes Chapter 4 Identify various types of cash flow patterns Compute the future value and the present value of different cash flow streams Compute the return
More informationTIME VALUE OF MONEY (TVM)
TIME VALUE OF MONEY (TVM) INTEREST Rate of Return When we know the Present Value (amount today), Future Value (amount to which the investment will grow), and Number of Periods, we can calculate the rate
More informationMAT116 Project 2 Chapters 8 & 9
MAT116 Project 2 Chapters 8 & 9 1 81: The Project In Project 1 we made a loan workout decision based only on data from three banks that had merged into one. We did not consider issues like: What was the
More informationDISCOUNTED CASH FLOW VALUATION and MULTIPLE CASH FLOWS
Chapter 5 DISCOUNTED CASH FLOW VALUATION and MULTIPLE CASH FLOWS The basic PV and FV techniques can be extended to handle any number of cash flows. PV with multiple cash flows: Suppose you need $500 one
More informationFinance 331 Corporate Financial Management Week 1 Week 3 Note: For formulas, a Texas Instruments BAII Plus calculator was used.
Chapter 1 Finance 331 What is finance?  Finance has to do with decisions about money and/or cash flows. These decisions have to do with money being raised or used. General parts of finance include: 
More informationHow to calculate present values
How to calculate present values Back to the future Chapter 3 Discounted Cash Flow Analysis (Time Value of Money) Discounted Cash Flow (DCF) analysis is the foundation of valuation in corporate finance
More informationCHAPTER 2. Time Value of Money 21
CHAPTER 2 Time Value of Money 21 Time Value of Money (TVM) Time Lines Future value & Present value Rates of return Annuities & Perpetuities Uneven cash Flow Streams Amortization 22 Time lines 0 1 2 3
More informationTIME VALUE OF MONEY. HewlettPackard HP12C Calculator
SECTION 1, CHAPTER 6 TIME VALUE OF MONEY CHAPTER OUTLINE Clues, Hints, and Tips Present Value Future Value Texas Instruments BA II+ Calculator HewlettPackard HP12C Calculator CLUES, HINTS, AND TIPS Present
More informationTime Value of Money. If you deposit $100 in an account that pays 6% annual interest, what amount will you expect to have in
Time Value of Money Future value Present value Rates of return 1 If you deposit $100 in an account that pays 6% annual interest, what amount will you expect to have in the account at the end of the year.
More information2. How would (a) a decrease in the interest rate or (b) an increase in the holding period of a deposit affect its future value? Why?
CHAPTER 3 CONCEPT REVIEW QUESTIONS 1. Will a deposit made into an account paying compound interest (assuming compounding occurs once per year) yield a higher future value after one period than an equalsized
More informationChapter 4: Time Value of Money
FIN 301 Homework Solution Ch4 Chapter 4: Time Value of Money 1. a. 10,000/(1.10) 10 = 3,855.43 b. 10,000/(1.10) 20 = 1,486.44 c. 10,000/(1.05) 10 = 6,139.13 d. 10,000/(1.05) 20 = 3,768.89 2. a. $100 (1.10)
More informationMcGrawHill/Irwin Copyright 2011 by the McGrawHill Companies, Inc. All rights reserved.
Chapter 13 Annuities and Sinking Funds McGrawHill/Irwin Copyright 2011 by the McGrawHill Companies, Inc. All rights reserved. #13 LU13.1 Annuities and Sinking Funds Learning Unit Objectives Annuities:
More informationFIN 5413: Chapter 03  Mortgage Loan Foundations: The Time Value of Money Page 1
FIN 5413: Chapter 03  Mortgage Loan Foundations: The Time Value of Money Page 1 Solutions to Problems  Chapter 3 Mortgage Loan Foundations: The Time Value of Money Problem 31 a) Future Value = FV(n,i,PV,PMT)
More informationTIME VALUE OF MONEY PROBLEM #7: MORTGAGE AMORTIZATION
TIME VALUE OF MONEY PROBLEM #7: MORTGAGE AMORTIZATION Professor Peter Harris Mathematics by Sharon Petrushka Introduction This problem will focus on calculating mortgage payments. Knowledge of Time Value
More informationTIME VALUE OF MONEY PROBLEM #5: ZERO COUPON BOND
TIME VALUE OF MONEY PROBLEM #5: ZERO COUPON BOND Professor Peter Harris Mathematics by Dr. Sharon Petrushka Introduction This assignment will focus on using the TI  83 to calculate the price of a Zero
More informationDecision Making in Finance: Future Value of an Investment VI.A Student Activity Sheet 1: You Have to Get Money to Make Money
Decision Making in Finance: Future Value of an Investment VI.A Student Activity Sheet 1: You Have to Get Money to Make Money 1. Kafi is considering three job offers in educational publishing. One is a
More informationTIME VALUE OF MONEY. Return of vs. Return on Investment: We EXPECT to get more than we invest!
TIME VALUE OF MONEY Return of vs. Return on Investment: We EXPECT to get more than we invest! Invest $1,000 it becomes $1,050 $1,000 return of $50 return on Factors to consider when assessing Return on
More informationReducing balance loans
Reducing balance loans 5 VCEcoverage Area of study Units 3 & 4 Business related mathematics In this chapter 5A Loan schedules 5B The annuities formula 5C Number of repayments 5D Effects of changing the
More informationActivity 5 Calculating a Car Loan
Teaching Notes/Lesson Plan Objective Within this lesson, the participant will be able to use the Casio calculator to determine such information as monthly payment, interest rate, and total cost of the
More informationThe Time Value of Money C H A P T E R N I N E
The Time Value of Money C H A P T E R N I N E Figure 91 Relationship of present value and future value PPT 91 $1,000 present value $ 10% interest $1,464.10 future value 0 1 2 3 4 Number of periods Figure
More information10.3 Future Value and Present Value of an Ordinary General Annuity
360 Chapter 10 Annuities 10.3 Future Value and Present Value of an Ordinary General Annuity 29. In an ordinary general annuity, payments are made at the end of each payment period and the compounding period
More information2 The Mathematics. of Finance. Copyright Cengage Learning. All rights reserved.
2 The Mathematics of Finance Copyright Cengage Learning. All rights reserved. 2.3 Annuities, Loans, and Bonds Copyright Cengage Learning. All rights reserved. Annuities, Loans, and Bonds A typical definedcontribution
More informationTIME VALUE OF MONEY. In following we will introduce one of the most important and powerful concepts you will learn in your study of finance;
In following we will introduce one of the most important and powerful concepts you will learn in your study of finance; the time value of money. It is generally acknowledged that money has a time value.
More informationFinance. Simple Interest Formula: I = P rt where I is the interest, P is the principal, r is the rate, and t is the time in years.
MAT 142 College Mathematics Finance Module #FM Terri L. Miller & Elizabeth E. K. Jones revised December 16, 2010 1. Simple Interest Interest is the money earned profit) on a savings account or investment.
More informationChapter 3 Mathematics of Finance
Chapter 3 Mathematics of Finance Section 3 Future Value of an Annuity; Sinking Funds Learning Objectives for Section 3.3 Future Value of an Annuity; Sinking Funds The student will be able to compute the
More informationBA II Plus Advanced Business Analyst Calculator
BA II Plus Advanced Business Analyst Calculator Quick Guide to Settings and Concepts Purpose of Guide This Quick Guide is a supplement to the BA II Plus Guidebook. It includes brief examples of commonly
More informationLesson 4 Annuities: The Mathematics of Regular Payments
Lesson 4 Annuities: The Mathematics of Regular Payments Introduction An annuity is a sequence of equal, periodic payments where each payment receives compound interest. One example of an annuity is a Christmas
More information1. If you wish to accumulate $140,000 in 13 years, how much must you deposit today in an account that pays an annual interest rate of 14%?
Chapter 2  Sample Problems 1. If you wish to accumulate $140,000 in 13 years, how much must you deposit today in an account that pays an annual interest rate of 14%? 2. What will $247,000 grow to be in
More informationCasio 9860 SelfGuided Instructions TVM Mode
Using TVM: Casio 9860 SelfGuided Instructions TVM Mode Instructions Screenshots TVM stands for 'Time, Value, Money'. TVM is the Financial Mode on the calculator. However, Financial Mathematics questions
More informationTime Value of Money, Part 4 Future Value aueof An Annuity. Learning Outcomes. Future Value
Time Value of Money, Part 4 Future Value aueof An Annuity Intermediate Accounting I Dr. Chula King 1 Learning Outcomes The concept of future value Future value of an annuity Ordinary annuity versus annuity
More informationThe explanations below will make it easier for you to use the calculator. The ON/OFF key is used to turn the calculator on and off.
USER GUIDE Texas Instrument BA II Plus Calculator April 2007 GENERAL INFORMATION The Texas Instrument BA II Plus financial calculator was designed to support the many possible applications in the areas
More informationTimeValueofMoney and Amortization Worksheets
2 TimeValueofMoney and Amortization Worksheets The TimeValueofMoney and Amortization worksheets are useful in applications where the cash flows are equal, evenly spaced, and either all inflows or
More informationIntroduction. Turning the Calculator On and Off
Texas Instruments BAII PLUS Calculator Tutorial to accompany Cyr, et. al. Contemporary Financial Management, 1 st Canadian Edition, 2004 Version #6, May 5, 2004 By William F. Rentz and Alfred L. Kahl Introduction
More informationDiscounted Cash Flow Valuation
Discounted Cash Flow Valuation Chapter 5 Key Concepts and Skills Be able to compute the future value of multiple cash flows Be able to compute the present value of multiple cash flows Be able to compute
More informationIntegrated Case. 542 First National Bank Time Value of Money Analysis
Integrated Case 542 First National Bank Time Value of Money Analysis You have applied for a job with a local bank. As part of its evaluation process, you must take an examination on time value of money
More informationKey Concepts and Skills. Multiple Cash Flows Future Value Example 6.1. Chapter Outline. Multiple Cash Flows Example 2 Continued
6 Calculators Discounted Cash Flow Valuation Key Concepts and Skills Be able to compute the future value of multiple cash flows Be able to compute the present value of multiple cash flows Be able to compute
More informationTime Value of Money Problems
Time Value of Money Problems 1. What will a deposit of $4,500 at 10% compounded semiannually be worth if left in the bank for six years? a. $8,020.22 b. $7,959.55 c. $8,081.55 d. $8,181.55 2. What will
More informationMath Workshop Algebra (Time Value of Money; TVM)
Math Workshop Algebra (Time Value of Money; TVM) FV 1 = PV+INT 1 = PV+PV*I = PV(1+I) = $100(1+10%) = $110.00 FV 2 = FV 1 (1+I) = PV(1+I)(1+I) = PV(1+I) 2 =$100(1.10) 2 = $121.00 FV 3 = FV 2 (1+I) = PV(1
More informationLesson TVM10040xx Present Value Ordinary Annuity Clip 01
      Cover Page       Lesson TVM10040xx Present Value Ordinary Annuity Clip 01 This workbook contains notes and worksheets to accompany the corresponding video lesson available online at:
More informationFINA 351 Managerial Finance, Ch.45, TimeValueofMoney (TVM), Notes
FINA 351 Managerial Finance, Ch.45, TimeValueofMoney (TVM), Notes The concept of timevalueofmoney is important to know, not only for this class, but for your own financial planning. It is a critical
More informationOrdinary Annuities Chapter 10
Ordinary Annuities Chapter 10 Learning Objectives After completing this chapter, you will be able to: > Define and distinguish between ordinary simple annuities and ordinary general annuities. > Calculate
More informationThe time value of money: Part II
The time value of money: Part II A reading prepared by Pamela Peterson Drake O U T L I E 1. Introduction 2. Annuities 3. Determining the unknown interest rate 4. Determining the number of compounding periods
More informationDiscounted Cash Flow Valuation
6 Formulas Discounted Cash Flow Valuation McGrawHill/Irwin Copyright 2008 by The McGrawHill Companies, Inc. All rights reserved. Chapter Outline Future and Present Values of Multiple Cash Flows Valuing
More informationTopics. Chapter 5. Future Value. Future Value  Compounding. Time Value of Money. 0 r = 5% 1
Chapter 5 Time Value of Money Topics 1. Future Value of a Lump Sum 2. Present Value of a Lump Sum 3. Future Value of Cash Flow Streams 4. Present Value of Cash Flow Streams 5. Perpetuities 6. Uneven Series
More informationChapter 5 Time Value of Money 2: Analyzing Annuity Cash Flows
1. Future Value of Multiple Cash Flows 2. Future Value of an Annuity 3. Present Value of an Annuity 4. Perpetuities 5. Other Compounding Periods 6. Effective Annual Rates (EAR) 7. Amortized Loans Chapter
More informationChapter 5 & 6 Financial Calculator and Examples
Chapter 5 & 6 Financial Calculator and Examples Konan Chan Financial Management, Spring 2016 Five Factors in TVM Present value: PV Future value: FV Discount rate: r Payment: PMT Number of periods: N Get
More informationTHE TIME VALUE OF MONEY
QUANTITATIVE METHODS THE TIME VALUE OF MONEY Reading 5 http://proschool.imsindia.com/ 1 Learning Objective Statements (LOS) a. Interest Rates as Required rate of return, Discount Rate and Opportunity Cost
More informationPV Tutorial Using Calculator (Sharp EL738)
EYK 152 PV Tutorial Using Calculator (Sharp EL738) TABLE OF CONTENTS Calculator Configuration and Abbreviations Exercise 1: Exercise 2: Exercise 3: Exercise 4: Exercise 5: Exercise 6: Exercise 7: Exercise
More informationrate nper pmt pv Interest Number of Payment Present Future Rate Periods Amount Value Value 12.00% 1 0 $100.00 $112.00
In Excel language, if the initial cash flow is an inflow (positive), then the future value must be an outflow (negative). Therefore you must add a negative sign before the FV (and PV) function. The inputs
More informationFuture Value of an Annuity Sinking Fund. MATH 1003 Calculus and Linear Algebra (Lecture 3)
MATH 1003 Calculus and Linear Algebra (Lecture 3) Future Value of an Annuity Definition An annuity is a sequence of equal periodic payments. We call it an ordinary annuity if the payments are made at the
More informationUsing Financial Calculators
Chapter 4 Discounted Cash Flow Valuation 4B1 Appendix 4B Using Financial Calculators This appendix is intended to help you use your HewlettPackard or Texas Instruments BA II Plus financial calculator
More informationContinue this process until you have cleared the stored memory positions that you wish to clear individually and keep those that you do not.
Texas Instruments (TI) BA II PLUS Professional The TI BA II PLUS Professional functions similarly to the TI BA II PLUS model. Any exceptions are noted here. The TI BA II PLUS Professional can perform two
More informationUsing Financial And Business Calculators. Daniel J. Borgia
Using Financial And Business Calculators Daniel J. Borgia August 2000 Table of Contents I. Texas Instruments BA35 SOLAR II. Texas Instruments BAII PLUS III. Hewlett Packard 12C IV. Hewlett Packard 17BII..
More informationChapter 6. Time Value of Money Concepts. Simple Interest 61. Interest amount = P i n. Assume you invest $1,000 at 6% simple interest for 3 years.
61 Chapter 6 Time Value of Money Concepts 62 Time Value of Money Interest is the rent paid for the use of money over time. That s right! A dollar today is more valuable than a dollar to be received in
More informationSome Mathematics of Investing in Rental Property. Floyd Vest
Some Mathematics of Investing in Rental Property Floyd Vest Example 1. In our example, we will use some of the assumptions from Luttman, Frederick W. (1983) Selected Applications of Mathematics of Finance
More informationHow To Use Excel To Compute Compound Interest
Excel has several built in functions for working with compound interest and annuities. To use these functions, we ll start with a standard Excel worksheet. This worksheet contains the variables used throughout
More informationLesson 1. Key Financial Concepts INTRODUCTION
Key Financial Concepts INTRODUCTION Welcome to Financial Management! One of the most important components of every business operation is financial decision making. Business decisions at all levels have
More informationF V P V = F V = P (1 + r) n. n 1. FV n = C (1 + r) i. i=0. = C 1 r. (1 + r) n 1 ]
1 Week 2 1.1 Recap Week 1 P V = F V (1 + r) n F V = P (1 + r) n 1.2 FV of Annuity: oncept 1.2.1 Multiple Payments: Annuities Multiple payments over time. A special case of multiple payments: annuities
More informationCompounding Quarterly, Monthly, and Daily
126 Compounding Quarterly, Monthly, and Daily So far, you have been compounding interest annually, which means the interest is added once per year. However, you will want to add the interest quarterly,
More informationPurpose EL773A HP10B BAII PLUS Clear memory 0 n registers
DHow to Use a Financial Calculator* Most personal finance decisions involve calculations of the time value of money. Three methods are used to compute this value: time value of money tables (such as those
More information14 Financial. Functions. Financial Functions 141. Contents
14 Financial Functions Contents Getting Started: Financing a Car... 142 Getting Started: Computing Compound Interest... 143 Using the TVM Solver... 144 Using the Financial Functions... 145 Calculating
More informationTime Value of Money Concepts
BASIC ANNUITIES There are many accounting transactions that require the payment of a specific amount each period. A payment for a auto loan or a mortgage payment are examples of this type of transaction.
More informationReal estate investment & Appraisal Dr. Ahmed Y. Dashti. Sample Exam Questions
Real estate investment & Appraisal Dr. Ahmed Y. Dashti Sample Exam Questions Problem 31 a) Future Value = $12,000 (FVIF, 9%, 7 years) = $12,000 (1.82804) = $21,936 (annual compounding) b) Future Value
More informationFIN 3000. Chapter 6. Annuities. Liuren Wu
FIN 3000 Chapter 6 Annuities Liuren Wu Overview 1. Annuities 2. Perpetuities 3. Complex Cash Flow Streams Learning objectives 1. Distinguish between an ordinary annuity and an annuity due, and calculate
More informationSaving Money for Finance Students by Utilizing the TVM Capabilities of Graphing Calculators
Saving Money for Finance Students by Utilizing the TVM Capabilities of Graphing Calculators Glenna Sumner, Ph.D. Assistant Professor of Economics Abstract Michael Lloyd, Ph.D. Professor of Mathematics
More informationCHAPTER 5 INTRODUCTION TO VALUATION: THE TIME VALUE OF MONEY
CHAPTER 5 INTRODUCTION TO VALUATION: THE TIME VALUE OF MONEY 1. The simple interest per year is: $5,000.08 = $400 So after 10 years you will have: $400 10 = $4,000 in interest. The total balance will be
More informationTI86 Financial Functions
TI86 Financial Functions Loading and Installing Finance Features on Your TI86... 2 Loading the Finance Features into TI86 Memory... 2 Installing the Finance Features for Use... 2 Displaying the FIN
More informationA Typical Financial Problem
Cell Phone Apps in a Business Math Class Steven J. Wilson Johnson County Community College Kansas City Math Tech EXPO, 2014 Slides available at: http://www.milefoot.com/about/presentations/cellphoneapps.pdf
More information