Present Value Calculation - Monroe 3180 User Manual

ENTER
0
Here is the payment schedule of the account over the 6 periods.
Note that the balance at the end of the first period is $50.00. Interest accrues for the first period but is not
credited to the account until after a complete compounding period. Such payments are called payments
in arrears or ordinary annuities.
PERIOD
1
2
3
4
5
6
The penny difference comes from the fact that the Compound Interest/Annuity functions are using
maximum decimal place accuracy to calculate and rounds the final answer to obtain the ending balance.
EXAMPLE: Now combine the previous two examples, the present value of a saving account is
$1,000.00 and $50.00 is deposited each month, what is the balance after six deposits? Since all the
values (interest rate coupons per year, total number of periods and payment amount) are still stored from
the previous example, just enter the PRESENT VAL amount and press the FUTURE VALUE key.
ENTER
1000

PRESENT VALUE CALCULATION

The Present Value calculates the initial amount required accumulating a Future Value. The present
Value and Payment amounts are taken into account in the calculation.
EXAMPLE: What is the maximum amount that can be borrowed at 15% for 4 years, at payments of
$150.00 per month. In other words, what is the present value of the 48 payments (4 years x 12) monthly
payments.
ENTER
15
34
PRESS RESULTS DISPLAYED
PRESENT Present Value 0.00
VALUE
FUTURE Future Value 303.78
VALUE
PAYMENT BALANCE
$50.00 $ 50.00
$50.00 $100.25
$50.00 $150.75
$50.00 $201.50
$50.00 $252.51
$50.00 $303.77
PRESS RESULTS DISPLAYED
PRESENT Present Value 1,000.00
VALUE
FUTURE Future Value 1,334.15
VALUE
PRESS RESULTS DISPLAYED
COUPON Coupon Rate 15.999%
MONROE TRADER II
INTEREST
$0.25
$0.50
$0.75
$1.01
$1.26