tvm_Pmt(5,8,-25000,0,1,1) Press [ENTER]. Your screen should look like this: tvm_Pmt(5,8,-25000,0,1,1) 6261.41 Your payments would be $6261.41. Note that the rules for negative values are the same for this application as for the TVM Solver. Decision Flowchart for Time Value of Money Problems This flowchart should help you organize your approach to solving time value of money problems. Start at and work your way down the chart until you have identified the ‘Problem’ type of problem. Single Dollar, Mixed Cash Flow, Future Value Annuity, Present Value Problem Types: Annuity, Perpetuity Step 1: Is it a one time cash flow or a multiple cash flow problem? Step 2: If it is a one time cash flow, it is a DONE single dollar problem. If it is a multiple cash flow problem, are all the payments the same or different? Step 3: If all the payments are the same, are they finite or infinite? If the payments the different, it is a DONE mixed cash flow. Step 4: If all the payments are the same and infinite, it is a DONE perpetuity. If all the payments are the same and finite, it is an annuity–but is it like a savings problem or like a borrowing problem? Step 5: If it is like a savings problem, it is DONE future value annuity. If it is like a borrowing problem, it is DONE present value annuity. Once you have some experience with your graphing calculator, your main task will be to figure out the type of question being asked. Calculating is the easy part! Chapter 7–Non-Annual Compounding and Discounting
tvm_Pmt(5,8,-25000,0,1,1) Press [ENTER]. Your screen should look like this: tvm_Pmt(5,8,-25000,0,1,1) 6261.41 Your payments would be $6261.41. Note that the rules for negative values are the same for this application as for the TVM Solver. Decision Flowchart for Time Value of Money Problems This flowchart should help you organize your approach to solving time value of money problems. Start at ‘Problem’ and work your way down the chart until you have identified the type of problem. Problem Types: Single Dollar, Mixed Cash Flow, Future Value Annuity, Present Value Annuity, Perpetuity Step 1: Is it a one time cash flow or a multiple cash flow problem? Step 2: If it is a one time cash flow, it is a single dollar problem. DONE If it is a multiple cash flow problem, are all the payments the same or different? Step 3: If all the payments are the same, are they finite or infinite? If the payments the different, it is a mixed cash flow. DONE Step 4: If all the payments are the same and infinite, it is a perpetuity. DONE If all the payments are the same and finite, it is an annuity–but is it like a savings problem or like a borrowing problem? Step 5: If it is like a savings problem, it is future value annuity. DONE If it is like a borrowing problem, it is present value annuity. DONE Once you have some experience with your graphing calculator, your main task will be to figure out the type of question being asked. Calculating is the easy part! Chapter 7–Non-Annual Compounding and Discounting
FinCalcGuideGraphing.docx