hp40g+.book Page 3 Friday, December 9, 2005 1:03 AM
Using the Finance Solver
flow diagram shows lease payments at the beginning of
each period.
PV
Capitalized
}
value of
lease
1
2
PMT
PMT
The following cash flow diagram shows deposits into an
account at the end of each period.
1
2
PMT
PMT
PV
As these cash-flow diagrams imply, there are five TVM
variables:
N
The total number of compounding periods
or payments.
I%YR
The nominal annual interest rate (or
investment rate). This rate is divided by
the number of payments per year (P/YR)
to compute the nominal interest rate per
compounding period -- which is the
interest rate actually used in TVM
calculations.
The present value of the initial cash flow.
To a lender or borrower, PV is the amount
PV
of the loan; to an investor, PV is the initial
investment. PV always occurs at the
beginning of the first period.
3
4
5
PMT
PMT
PMT
FV
FV
3
4
5
PMT
PMT
PMT
12-3