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Unformatted text preview: ou see “BGN” or “Begin” in the display of your calculator, you have it set for an annuity due Annuity – Sweepstakes Example
Annuity – Sweepstakes Example Suppose you win the Publishers Clearinghouse $10 million sweepstakes. The money is paid in equal annual installments of $333,333.33 over 30 years. If the appropriate discount rate is 5%, how much is the sweepstakes actually worth today? 30 N
CPT PV = 5,124,150.29 Finding the Payment
Finding the Payment Suppose you want to borrow $20,000 for a new car. You can borrow at 8% per year, compounded monthly (8/12 = .66667% per month). If you take a 4 year loan, what is your monthly payment? N; 4(12) = 48 PV; 20,000 I/Y; .66667 CPT PMT = 488.26 Finding the Number of Payments
Finding the Number of Payments Suppose you borrow $2000 at 5% and you are going to make annual payments of $734.42. How long before you pay off the loan? 5 I/Y 2000 PV 734.42 PMT CPT N = 3 years Findingthe Rate
Finding the Rate Suppose you bo...
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This document was uploaded on 01/14/2014.
- Winter '14