Then use that PV as the FV on the following cash flow diagram, and calculate the PMT.
Set to End mode. Press
Table 13-22 Calculating the monthly deposit required
Gains That Go Untaxed Until Withdrawal
You can use the TVM application to calculate the future value of a tax-free or tax-deferred
account. (Current tax laws and your income determine whether both interest and principal are
tax-free. You can solve for either case.)
The purchasing power of that future value depends upon the inflation rate and the duration
of the account.
You are considering opening a tax-deferred account with a dividend rate of 8.175%. If you
invest 2,000 at the beginning of each year for 35 years, how much will be in the account at
retirement? How much will you have paid into the account? How much interest will you have
earned? If your post-retirement tax rate is 15%, what will the after tax future value of the
Figure 21 Cash flow diagram (Calculate PMT)
if BEGIN annunciator is displayed.
Stores amount you need.
Stores amount you are starting
Sets payments per year.
Stores number of deposits.
Stores interest rate.
Calculates monthly deposit