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Module 1 - Chapter 5 - Part 2

# Module 1 - Chapter 5 - Part 2 - CHAPTER 5 Time Value of...

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Time Value of Money CHAPTER 5

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All new The next several slides are all new, and emphasize a common problem students have with the financial calculator. I think you will find this useful.
Future Value - single sums If you deposit \$100 in an account earning 6% with monthly compounding , how much would you have in the account after 5 years?

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Future Value - single sums If you deposit \$100 in an account earning 6% with monthly compounding , how much would you have in the account after 5 years? 0 ? PV = PV = FV = FV =
Calculator Solution 1: P/Y = 12 I = 6 N = 60 PV = -100 FV = \$134.89 0 0 60 60 PV = -100 PV = -100 FV = FV = Future Value - single sums If you deposit \$100 in an account earning 6% with monthly compounding , how much would you have in the account after 5 years?

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Calculator Solution 1: P/Y = 12 I = 6 N = 60 PV = -100 FV = \$134.89 0 0 60 60 PV = -100 PV = -100 FV = FV = 134. 134. 89 89 Future Value - single sums If you deposit \$100 in an account earning 6% with monthly compounding , how much would you have in the account after 5 years?
Calculator Solution 2: P/Y = 1 I = 6/12 = 0.5 N = 60 PV = -100 FV = \$134.89 0 0 60 60 PV = -100 PV = -100 FV = FV = 134.

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