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5. (10) (I/Y)
6.
(FV)
F. Calculating the present value of an annuity:
Example: How much should you invest now so that, starting one year from today, your daughter can
receive $6,000 per year for the next five years? Assume the discount rate is 15%.
Keystrokes
Clear all memory.
1.
(OS) (C ALL)
2.
(1) (OS) (P/YR) (C)
3. (6000) (PMT)
4.
(5) (N)
5. (15) (I/Y)
6. (PV)
G.
Calculating the present value of an annuity due:
Example: In this case, instead of receiving payments at the end of each year, your daughter will
receive the payments at the beginning of each year. Therefore, her first payment will be received
immediately.
10.00
-2,238.50
Display
0.00
0.00
6,000.00
5.00
15.00
-20,112.93
Enter the annual interest rate
of 10%.
Computes the future value of
$1,850 deposit earning 10
percent annual interest after 2
years.
Description
Clears Time-Value-of-Money
worksheet.
Sets the frequency of
compounding to once per
year and clears the register.
Enter $6,000 as the annuity
payment.
Enter the number of periods
of 5 years.
Enter the annual interest rate
of 15%.
Computes the present value
of a $6,000 end-of-the period
annuity earning 15 percent
annual interest for 5 years.
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