Unformatted text preview: TI 83+ and Tips for Solver To use Solver: Select APPS, ENTER Select #1 Finance ENTER Input values using the guide below; For the unknown value, enter 0; After entering all the values, put the cursor on the unknown value; To get the answer, press SOLVE (Press these two keys at the same time, ALPHA and ENTER) In our class formulas: r = stated annual interest rate m = 1 for compound annually, 2 for compound semiannually, 4 for compound quarterly etc. t = time in terms of years n = number of compounding time periods (m*t) i = interest rate per compounding time period (r/m) R = PMT = regular deposit or payment To input values into Solver : (Do not use commas or dollar signs.) N =Number of time periods Same as in for mula For annuity due, use the given “n” value (not n + 1) I % = Stated Rate Use the stated annual rate, not the “i” value. Do not use decima ls (.07 = 7, .085 = 8.5) PV = Present Value, Principal Amount of original deposit or loa n For a FVA problem, PV = 0 since ther e is no PV in the FVA for mula PMT = Regular payment or deposit. Same as R value in the annuity. If the “R” is given, enter as a negative. For a lump sum compound inter est, PMT = 0 since there are no PMTS FV = Future Value, Maturity Value For a PVA problem, FV = 0 since ther e is no FV in the PVA for mula P/Y=Payments per year Use “ m” value C/Y = Compounding periods Use “ m” value PMT: Highlight “END” except for Annuity Due , then highlight BEGIN (The default setting is END.) If entering PMT and FV (FVA), enter PMT as a negative, then ignor e the negative in the final answer. PMT and PV (PVA), enter PMT as a negative, then ignor e the negative in the final answer. PV and FV (compound interest of a lump sum), enter one of the values has to be negative. Solver N I PV PMT ® FV p/y c/y Lump S um Compounding n r As stated in problem 0 As stated in problem m m End – Use for ordinary annuity (PMTS are at the end of the time period.) This is the default setting. ! TI83 Additional Guide for TVM 02/04/09 PVA (Present value annuity) Or FVA (Future value annuity) n r As stated in problem As stated in problem As stated in problem m m Begin – Use for annuity due (PMTS at beginning of time period) Using TI83 to Solve Finance Proble ms 1. Lump S um Compound Interest – Find “n”, number of time periods. How many years does it take $3000 to be worth $10,000 at 12% compounded quarterly? Select APPS, ENTER Select #1 Finance ENTER Select #1 TVM Solver ENTER The TVM Solver window is displa yed. Use the arrow key (or ENTER) and record value for ea ch option. N = 0 (number of quarters, since it is the unknown input “0”) Enter or Arrow down I% = 12 (yearly or stated percent rate, r = 12%) Enter or Arrow down PV = 3000 (present value = PV = 3000, do not use commas) Enter or Arrow down Reminder: PMT = 0 (there is no regular payment so input a zero) Enter or Arrow down When using FV = 10000 (future value is $10,000 but do not use commas) Enter or Arrow down PV, PMT, P/Y = 4 (number of compounding periods per year = m = 4) Enter or Arrow down and/or FV, one value has to be C/Y = 4 (number of compounding periods per year = m = 4) Enter or Arrow down entered as a Highlight END for ordinary annuity, BEGIN for annuity due. negative.
This is not an annuity problem so use the default setting of END. Since you are looking for N, arrow up and put the cursor on the N prompt. Select SOLVE by pressing the ALPHA and ENTER keys at the same time. The answer is 40.73 quarters, or 40.73/4 = 10.18 years 2. Future Value Annuity Find the a mount of each payment (R or PMT). In 8 years, Samo wants to ha ve $240,000 in her retirement account. How much should she deposit semia nnually (interest rate is 4% compound semia nnually) to obtain this goa l? Select APPS, ENTER Select #1 Finance ENTER Select #1 TVM Solver ENTER The TVM Solver window is displa yed. Use the arrow key (or ENTER) and record value for ea ch option. N = 16 (N=8*2=16) Enter or Arrow down I% = 4 (yearly or stated percent rate) Enter or Arrow down PV = 0 (present value) Enter or Arrow down (Ther e is no PV (P) in the FVA problem.) PMT = 0* (This is the unknown so put in “0”.) Enter or Arrow down FV = 240000 (future value, do not include a common) Enter or Arrow down P/Y = 2 (number of compounding periods per year = m) Enter or Arrow down C/Y = 2 (number of compounding periods per year = m) Enter or Arrow down Highlight END for ordinary annuity, BEGIN for annuity due. Highlight END. Since you are looking for PMT, arrow up and put the cursor on the PMT prompt. Select SOLVE by pressing the ALPHA and ENTER keys at the same time. The answer is12,876.03, ignor e negative sign. 3. Present Value Annuity – PVA. Find the Payment (PMT = R) Ellen takes out a $30,000 loan for a new car. The loan is to be repaid in three years by ma king monthly payments at 12% annual interest compounded monthly. Find the monthly payment. Select APPS, ENTER Select #1 Finance ENTER Select #1 TVM Solver Enter The TVM Solver window is displayed. Use the arrow key (or ENTER) and record a value for each option. N = 12*3 or 36 (m*t = n = number of payment periods) Enter or Arrow down I% = 12 (yearly or stated percent rate) Enter or Arrow down PV = 1000 (present value) Enter or Arrow down PMT = 0* (This is the unknown, so insert zero.) Enter or Arrow down FV = 0 (future value) Enter or Arrow down P/Y = 12 (m = number of payments per year) Enter or Arrow down C/Y = 12 (same as P/Y) Enter or Arrow down For a loan problem, highlight END. Since PMT is the unknown, put the cursor on PMT. Select SOLVE by pressing the ALPHA and ENTER keys at the same time. The answer is 996.43,ignor e negative sign. *This is the unknown. Input a zero. TI83 Additional Guide for TVM 02/04/09 ...
View
Full Document
 Spring '08
 DONTKNOW
 TVM Solver ENTER, Finance ENTER

Click to edit the document details