 2 of 19 
With the calculator, you can also input:
N = 7 ; I% =
5 ;
PV = 250,000 ; Solve for FV.
It’s value will be $351,775.11 in seven years
.
3.
What is the present value of a security that promises to pay you $150,000 in 15
years? Assume that you can earn 5 percent if you were to invest in another
security of equal risk.
The timeline would look like:
0
5%
1
2
15




PV =
?
FV
15
= $150,000
This gives us the inputs for the PV formula:
PV = $150,000/(1.05)
15
= $150,000/(2.07892817941) = $72,152.56
With the calculator, you can also input:
N = 15 ; I% =
5 ;
FV = 150,000 ; Solve for PV.
It’s present value is $ 72,152.56
.
4.
Find the present value equivalent of $50,000 you expect to receive five years
from now under each of the following discount rates:
a)
12 percent interest, compounded annually.
With the calculator, you can just input:
N = 5 ; I% =
12 ;
FV = 50,000 ; Solve for PV.
PV = $28,371.34
b)
12 percent interest, compounded semiannually.
With the calculator, you can just input:
N = 10; I% =
6 ;
FV = 50,000 ; Solve for PV.
PV = $27,919.74
c)
12 percent interest, compounded quarterly.
With the calculator, you can just input:
N = 20 ; I% =
3 ;
FV = 50,000 ; Solve for PV.
PV = $27,683.79