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Time Value of Money

 Self-Paced Overview

Using a Financial Calculator

Example 1:

How much will $15,000 be worth in five years if interest is 8% compounded quarterly?

Using an HP 10bII+

  1. Read the problem thoroughly.

    Remember cash outflows carry a minus sign.

  2. Make sure what is being asked in the problem.

    What is the future value of the $15,000?

  3. Clear the calculator.

    C    C ALL

  4. Input the known value.

    1  5  0  0  0  +/  PV

  5. Input the number of compounding periods per year.

    4    P/YR

  6. Input the annual interest rate.

    8  I/YR

  7. Input the total number of compounding periods.

    2  0  N

  8. Request the unknown.

    FV

Answer: $22,289.21

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