Ch1TVAssessmentQuizHandout

# Ch1TVAssessmentQuizHandout - Loan Amort Chapter 1 Time...

This preview shows pages 1–10. Sign up to view the full content.

Chapter 1 Time Value Assessment Quiz Loan Amort.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Using the BAII+ If you’ve lost the User’s Guide : http://education.ti.com/educationportal/appsde
Using the BAII+ Set P/Y to 1 2 nd I/Y (i.e. P/Y) 1 [Enter] (i.e. SET) CE/C CE/C

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Using the BAII+ Make sure PMTs are set to END. 2 nd PMT (i.e. BGN) (Should say “END”) If it says “BGN”: press 2 nd [ENTER] (i.e. SET) Now it should say “END” Press CE/C
Using the BAII+ Set # of decimal places to at least 4. 2 nd decimal point key (or Format) 4 [Enter] CE/C CE/C

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
1. If you deposited \$1000 today in an account that pays 5% interest compounded annually, how much will be in that account at the end of 10 years? How much interest will the account earn the 1st year? 0 10 1000|------------------------/\/\---------| ? PV FV
n = 10 i = 5 PV = 1000 CPT FV 1628.89 0 10 1000|---------------/\/\---------| 1628.89

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Interest first year can be calculated using the simple interest formula: i = Prt (or principal x rate x time) i = 1000 x .05 x 1 i = 50 What principal will be used to calculate the 2 nd year’s interest? 1000 + 50 = 1050 1050 x .05 x 1 = 52.50
What if the interest had not been compounded . That is, if this account paid simple interest, how much would the FV be at the end of 10 years? I = P r t = \$1000 x .05 x 10 = \$500 FV = P + I = \$1000 + \$500 FV = \$1500 FV w/compounding was \$ 1628.89 What accounts for the difference?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 36

Ch1TVAssessmentQuizHandout - Loan Amort Chapter 1 Time...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online