|
|
|
Applications
|
|
|
 1 |
Enter number of periods, press n.
|
| |
| 2 |
Enter interest rate per period, press i.
|
| |
| 3 |
Enter amount of periodic payment, press PMT.
|
| |
| 4 |
Press PV to obtain amount of principal (present value).
|
|
|
|
Sample Case 1: If you decide to buy a car for which you plan to
pay $80 per month for 36 months, and you are willing to pay 6% annual
interest, how much can you afford to pay for the car?
|
|
|
Solution
|
| | Enter: | | | See Displayed: | | |
|
| |
| 36 n 6 SAVE 12 ÷ i 80 PMT PV | | | | $ |
| |
|
amount you can pay for car. (A Rolls-Royce is definitely out)
|
|
|
|
Sample Case 2: Bob Jones is the recipient of an inheritance from his father. The terms of the will are: (a) Bob may elect to receive $1000 a year at the end of each year for the next twenty years or, (b)
receive a lump sum of $13,500 now. He assumes that inflation will erode
the value of his money in either case, so he is holding the inflation
factor as an unavoidable constant. He also assumes that money will be
worth 4.75 % on an annual basis. From a financial standpoint only, which alternative is better?
|
|
|
Solution
|
| | Enter: | | | See Displayed: | | |
|
| |
| 20 n 4.75 i 1000 PMT PV | | | | $ |
| |
|
present value
|
|
| |
| |
|
difference between present value of annuity and lump sum (he takes the lump sum).
|
|
|
Monthly Payment of Annuity (Direct Reduction Loan)
|
|
This calculation finds the periodic payment amount when the principal (present value), number of periods, and interest rate per period are known. Enter the information as follows:
|
|
| 1 |
Enter number of periods, press n.
|
| |
| 2 |
Enter interest per period, press i.
|
| |
| 3 |
Enter principal, press PV.
|
| |
| 4 |
Press PMT to obtain amount of periodic payment.
|
|
|
