{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# Savingforretirement savingforretirement

This preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: Flows – FV Multiple Cash Flows – FV Example 1 Suppose you invest \$500 in a mutual fund today and \$600 in one year. If the fund pays 9% annually, how much will you have in two years? Year 0 CF: 2 N; ­500 PV; 9 I/Y; CPT FV = 594.05 Year 1 CF: 1 N; ­600 PV; 9 I/Y; CPT FV = 654.00 Total FV = 594.05 + 654.00 = 1248.05 Multiple Cash Flows – Example 1 Multiple Cash Flows – Example 1 Continued How much will you have in 5 years if you make no further deposits? First way: Year 0 CF: 5 N; ­500 PV; 9 I/Y; CPT FV = 769.31 Year 1 CF: 4 N; ­600 PV; 9 I/Y; CPT FV = 846.95 Total FV = 769.31 + 846.95 = 1616.26 Second way – use value at year 2: 3 N; ­1248.05 PV; 9 I/Y; CPT FV = 1616.26 Multiple Uneven Cash Flows: Multiple Uneven Cash Flows: Using the Calculator Another way to use the financial calculator for uneven cash flows is to use the cash flow keys Texas Instruments BA­II Plus Press CF and enter the cash flows beginning with year 0. You have to press the “Enter” key for each cash flow Use the down arrow key to mov...
View Full Document

{[ snackBarMessage ]}