Beruflich Dokumente
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The
Compounding Assumptions
Compounding Assumptions
Press
For
Unless
X [C/Y]
[^]
[C/Y] Display = 1
return to the calculator mode press
[QUIT] or [2nd][CPT]
To
3
An Alternative
Clearing
One
It
A Word on Rounding
Future Values
Present Values
44651.06
To
= $59,753.19(1.06 )
= $59,753.19(0.74725 ...)
= $44,651.06
5
10
Perpetuities
59753.19
Perpetuities,
To
11
12
PV of Annuity Example
1 (1 + k )n
PV0 = $10,600
5
1 (1.06)
= $10,600
.06
10,600
To
[CPT][PV]
13
FV of Annuity Example
14
(1 + k )n 1
FV5 = $10,600
10,600
[CPT][FV]
(1.06)5 1
= $10,600
.06
= $10,600(5.637092 ...)
To
= $59,753.19
Copyright 2002, Alan Marshall
15
Annuities Due
PV of an Annuity Due
1 (1 + k )n
(1 + k )
PV0 = $10,000
k
To
16
1 (1.06 )5
(1.06 )
= $10,000
.06
18
FV of an Annuity Due
[BGN][SET]
to set to BGN
[PMT]; 6 [I/Y]; 5 [N]
[CPT][PV] Display = -44,651.06
FVAn,k (Due )
10,000
(1 + k )n 1
(1 + k )
= PMT
k
To
19
[BGN][SET]
to set to BGN
10,000 [PMT]; 6 [I/Y]; 5 [N]
[CPT][FV] Display = -59,753.19
Valued at 6%
0
$20,000
$15,000
$25,000
$30,000
$10,000
$18,867.92
$13,349.95
$20,990.48
$23,762.81
$7,472.58
$84,443.74
To
21
22
We
20
After
23
24
$15,000
$15,000
$20,000
$20,000
$20,000
$27,500.89
$47,579.42
$75,080.31
25
$53,460.24
A 3 Yr $20,000 annuity
Example
CF0
= 0.00 [v]
C01 = 15000 [ENTER] [v] F1 = 2 [ENTER] [v]
C02 = 20000 [ENTER] [v] F2 = 3 [ENTER] [v]
[NPV] Display: I = 6 [ENTER] [v]
Display: NPV = [CPT]
Display: NPV = 75,080.31
Suppose
27
28
Example - Annuities
466500
26
Suppose
29
30
X quarterly:
Daily FV = $1 * (1 + (6 / 365))
EAR = 6.1831%
365
31
32
= $1.061831...
Using
33
34
Example
(
(
Quarterly q = ((1.06 )
q = (1 + EAR )
1 4)
(1 m )
1 m
1 4
= 5.8695%
(1 12 )
(1 365 )
1 12
Monthly q = (1.06 )
= 5.841...%
Daily q = (1.06 )
1 365
= 5.8273...%
Copyright 2002, Alan Marshall
35
36
Using
37
Example
Continuous Compounding
Your
38
39
40
Mortgage Example
Solution
$120,000
principal (=PV)
25 year amortization (n=300 months)
8% five year term
PV = C(PVA k mon ,n )
120,000 = C(PVA 0.6558119%,300 )
X EAR=8.16%
C=
X APR=7.87%
X monthly=0.655819%
=
Copyright 2002, Alan Marshall
41
120,000
PVA 0.6558119%,300
120,000
= $915.86
131.024343 ...
42
Renewal Balance
Other Questions
Principal
$120,000.00
At Renewal
110,563.38
Principal Paid
9,436.62
Interest Paid
45,514.98
Total Paid
54,951.60
Copyright 2002, Alan Marshall
45
46
44
We
47
48
Accumulated Values
Sixtieth
The
49
Over
Suppose
51
Buying - Loan
52
PMT =
50
The
Principal
23,525
=
= $539.64
PVIFA rMON ,N 43.5942...
53
54
Lease
Lease
$20,000 = PMT(PVIFAD0.4%,48 ) +
9,000
(1.004)48
9,000
= PMT(43.7686...) +
1.2112...
= PMT(43.7686...) + 7,430.61
On
12,569.39 = PMT(43.7686...)
PMT =
55
With
57
PV B0 = I PVA k b ,n +
56
Bonds
The
12,569.39
= 287.18
43.7686...
58
M
+
(1 k b )n
[P/Y]
= 2 [ENTER]
[N] = 24; [FV] = 1000; [PMT] = 45; [I/Y] = 7
[CPT][PV] = -1,160.58
59
60
10
The
SDT
X If
The
61
62
63
11