The document outlines the steps to calculate present value and future value for lump sum payments, annual year-end payments, and annual beginning of year payments using an ordinary calculator with an assumed 12% interest rate over 4 periods. For present value calculations, the steps involve raising 1 plus the interest rate to a power equal to the number of periods and dividing by the rate. For future value, the steps are similar but involve multiplication instead of division.
The document outlines the steps to calculate present value and future value for lump sum payments, annual year-end payments, and annual beginning of year payments using an ordinary calculator with an assumed 12% interest rate over 4 periods. For present value calculations, the steps involve raising 1 plus the interest rate to a power equal to the number of periods and dividing by the rate. For future value, the steps are similar but involve multiplication instead of division.
The document outlines the steps to calculate present value and future value for lump sum payments, annual year-end payments, and annual beginning of year payments using an ordinary calculator with an assumed 12% interest rate over 4 periods. For present value calculations, the steps involve raising 1 plus the interest rate to a power equal to the number of periods and dividing by the rate. For future value, the steps are similar but involve multiplication instead of division.
PRESENT VALUE LUMP-SUM PAYMENT PV of 1 Step 1: Enter 1+12% Step 2: Press division sign twice Step 3: Press equal sign for number of periods (4times)
ANNUAL YEAR-END PAYMENT
PV of ORDINARY ANNUITY Step 1: Enter 1+12% Step 2: Press division sign twice Step 3: Press equal sign for number of periods (4times) Step 4: Minus 1 Step 5 : Divide it by the rate 12% ANNUAL BEGINNING OF YEAR PAYMENT PV of ANNUITY IN ADVANCE Step 1: Enter 1+12% Step 2: Press division sign twice Step 3: Press equal sign for number of periods minus 1 (3times) Step 4: Minus 1 Step 5 : Divide it by the rate 12% Step 6: Plus 1 (Because the present value of the first advance payment is equal to 1, that is the reason why we only need to find the present value of the remaining payment periods, in this case 3 periods nalang) N USING ORDINARY CALCULATOR FUTURE VALUE UMP-SUM PAYMENT FV of 1 Step 1: Enter 1+12% Step 2: Press multiplication sign twice Step 3: Press equal sign for number of periods minus 1 (3times)
UAL YEAR-END PAYMENT
FV of ORDINARY ANNUITY Step 1: Enter 1+12% Step 2: Press multiplication sign twice Step 3: Press equal sign for number of periods minus 1 (3times) Step 4: Minus 1 Step 5 : Divide it by the rate 12% EGINNING OF YEAR PAYMENT FV of ANNUITY IN ADVANCE Step 1: Enter 1+12% Step 2: Press multiplication sign twice Step 3: Press equal sign for number of periods (4times) Step 4: Minus 1 Step 5 : Divide it by the rate 12% Step 6: Minus 1