Financial Calculator Time Value of Money: The 5 TVM Buttons What & How

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Talking about the ‘time value of money’, and okay, the most common function of financial calculators is using the time that allow you to calculate ‘present value’, ‘future of periods’ or even the ‘interest rate’. these people buy financial calculators in the any question you’re asked and a test will give you, or allow you to deduce, four value …and there’s your answer. so

There are five inputs, and if you have you to work out the four. and we’re gonna everything after this slide. and there’ll the dreaded ‘error 5′”. okay, so here’s live demonstrations. we’re going to calculate the monthly mortgage payments is where going to work out how many years to save up for an $80,000 car, if and i already have $5,000 saved. okay, now we’re going to go

Calculator, which is a type of financial you these main five buttons that i’m talking here, turn it on and off up here, and it’s these! it’s the n, the i/y, the pv, value, i/y is the interest rate, and n is any cash flow throughout the annuity, or go to our example. now our first example was to calculate the monthly mortgage to pay. so you push zero, and then– (i.e.) the

The button. that sets future value to zero. so three, hundred, thousand …have i got that right? no! looking at the camera! and then we press $300,000 (into) present value. the interest rate is 5%, annually. payments not annual payments, we need a monthly interest rate. not an annual rate which is 5, and then we simply divide it by 12 months and then rate. and then we

Have the number of periods. and again, we’ve got a 30-year out the number of month– months in 30 years. so we go 30 years times 12 equals now we’ve got the four inputs correct, yeah well, we’ve deduced them and entered will be compute, and then you press we’re trying to work out …and we work out 1,610 and 46 cents. and there you have your example. okay, now for our second

Still have all the values saved in our five ‘time value of money’ buttons. so 80,000, because we want to withdraw $80,000 from a bank. set that as the how many years it will take, so we have $12,000 a year. now it’s important that you make this a negative, so push now our present value is $5,000 saved. so 5,000, and that’s a negative rate is 7% so 7, i/y. and then since we–

Compute (cpt), number of n, and it should take 5.2357 years, or the dreaded error 5. so we’ve already mentioned it or shown how to do it, but watch this… okay, let’s say we have a problem so, we’ve got 100 as as the payment, and we’ve got 10 as the thi– if you’re taking a test this is really going to throw you. so what’s happened here? yeah in– this– this– is like

Even when you know how to fix least you’ll know what’s going on …as opposed to being freaked out when you direction. so our future value was a positive number, many positives made a crash because ‘time like, they should be alternative ends of a transaction. so, at one point you put out, and at another point you put money in. so we should be able to fix this by value was,

I think it was um– let’s just set it to 1,000. ooh 1,000, make this a negative number (to show that we take money out), and then– negative at the end. set that as our future value, and this should fix the rid of error 5 make sure that, ah, it balances as in, cash flows coming hope it helped. best of success! if you enjoyed the video, please share or that’ll be popping up

In your screen. or i’d even just appreciate a thumbs up, clarification. and please comment below if you want to stir up a discussion with

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Financial Calculator Time Value of Money: The 5 TVM Buttons What & How By Accofina