Financial Calculations Worksheet Page 9
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3019 - 3
Compound Interest Calculations
Now you can press 6 to draw a cash flow graph.
6(GRPH)
PV
FV
The left side is
, while the right side is
. The upper part of the graph is
positive (+), while the bottom part is negative (–).
u u u u u Installment savings
Input Condition: Future value is greater than the total of payments.
Formula Representation of Input Condition:
PMT
FV
PV
and
have different signs (positive, negative) when
= 0.
×
FV
n
PMT
FV
–
<
when
> 0
×
FV
n
PMT
FV
–
>
when
< 0
Example
Calculate the interest rate required to have a $2,500 balance in
an installment savings account in two years when $100 is
deposited each month and interest is compounded semiannu-
ally.
Perform the following key operations from the input screen.
= 2 × 12.)
c*bcw(Input
n
c
aw(
PV
= 0)
-baaw(
PMT
= –100)
cfaaw(
FV
= 2,500)
bcw(Monthly installment)
cw(Compounding every six months)
2(
I
%)
u u u u u Loans
Input Condition: Total of payments is greater than loan amount.
Formula Representation of Input Condition:
PMT
PV
FV
and
have different signs (positive, negative) when
= 0.
×
PV
n
PMT
PV
–
>
when
> 0
×
PV
n
PMT
PV
–
<
when
< 0
329
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