1. Not finding help here? Sign up for a free 30min tutor trial with Chegg Tutors
    Dismiss Notice
Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

TVM Problem solving the end amount.

Tags:
  1. Oct 30, 2007 #1
    [SOLVED] TVM Problem solving the end amount.

    1. The problem statement, all variables and given/known data

    2. A spreadsheet software or TVM solver on a calculator can be used to determine the equal monthly payments that can be paid from an annuity for a set length of time. You can enter different payments until you find the one that gives a closing balance of less than $1 after the set length of time. What monthly payment can be paid from an annuity of $100 000 earning 6.5% per annum, compounded monthly, with a life of 10 years?


    2. Relevant equations

    TVM Solver:

    N = (Number of payment periods)
    I% = (Annual Interest rate)
    PV = (Present value)
    PMT = (Payment, must be -number)
    FV = (Future value)
    P/Y = (Payment periods per year)
    C/Y = (Compounding periods per year)


    3. The attempt at a solution

    I did this question in Excel and got under $1, however I'm trying to send this answer with work from Excel done and TVM so I understand both ways to do this question. I'll show my excel file in an attachment.

    In the TVM solver I'm using on my TI-83 Plus I cannot seem to get the same results.

    N = 120.00
    I% = 6.50
    PV = 100000.00
    PMT = -1344.89
    FV = (To be solved)
    P/Y = 12.00
    C/Y = 12.00

    When solved, FV = 35265.34 (Which is wrong.)

    In my excel file, the answer should be $0.24 after the 10 years (120 months).
     

    Attached Files:

  2. jcsd
  3. Nov 2, 2007 #2
    The problem has been solved. I mis-understood the question when doing the TVM Solver.

    I was supposed to put 0 for FV, not what I got from my Excel answer, then use the solve for PMT.
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook

Have something to add?



Similar Discussions: TVM Problem solving the end amount.
  1. Problem solving (Replies: 1)

Loading...