Saving For The Future By Making Monthly Deposits - Texas Instruments BA II PLUS User Manual

Saving for the Future by Making Monthly Deposits

Accounts with payments made at the beginning of the period
are referred to as "annuity due" accounts. Interest on annuity
due accounts starts accumulating earlier and produces slightly
higher yields.
An individual has decided to invest $200 at the beginning of
each month in a retirement plan. What will the account balance
be at the end of 20 years if the fund earns an annual interest of
7.5 % compounded monthly, assuming beginning-of-period
payments?
Payment amount (PMT) = $200
Example: Regular Deposits (Annuity Due)
Procedure
Set all variables to defaults.
Set beginning-of-period
payments.
Return to calculator mode.
Enter number of payments
using payment multiplier.
Enter interest rate.
Enter amount of payment.
Compute future value.
Depositing $200 at the beginning of each month for 20 years
results in a future amount of $111,438.31.
2: TVM and Amortization Worksheets
Interest = 7.5%
Number of payments (N) = 240
. . .
Keystrokes
& } !
& ]
& V
& U
& Z ,
20
7.5
200
% 0
Future value(FV) = ?
RST
BGN
N=
-
I/Y=
S /
PMT=
FV=
Display
0.00
0.00
P
240.00
P
7.50
P
-200.00
Q
111,438.31
51