Finding the Future Value of a Lump Sum
Solution
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When you entered the real estate business, you took a
$50,000 lump-sum distribution from your retirement
program. You want to roll it over into an IRA that yields
7% compounded monthly. What will the account's value
be in 20 years when you reach age 65?
Steps
Clear TVM values.
Set monthly
compounding
periods.
Enter term of
account (in years).
Enter interest rate
of account.
Enter initial
deposit.*
Compute the future
value.
* You are "loaning" the bank $50,000. Since you are paying
the money out, you must make the number negative.
Keystrokes
12
20
7
50
Display
0.00
C/Y =
12.00
12.00
TRM=
20.00
I% =
7.00
LN = -50,000.00
FV = 201,936.94