Personal Finance
or managing your money
Money grew on trees Late Payment Reminder by flickr user wsssst

A = AMOUNT of money at the end of
the term
P = PRINCIPLE amount, the amount
originally invested or borrowed
r = RATE of interest as a decimal
number
n = NUMBER of times the principle is
compounded per year
t = TIME in years
Time Principle Rate Interest Balance

You invest $4500.00 at 5.75% interest compounded monthly. How
much money will you have at the end of three years?
A = AMOUNT of money at the end of
the term
P = PRINCIPLE amount, the amount
originally invested or borrowed
r = RATE of interest as a decimal
number
n = NUMBER of times the principle is
compounded per year
t = TIME in years

Using the TVM (Time Value Money) Solver ...
You invest $4500.00
Total Number of payments to the account
at 5.75% interest
(#years in account)(#times payments/year)
compounded monthly.
How much money will
N=36
you have at the end
I%=5.75
of three years?
PV=-4500
PMT=0
FV=5345.02
P/Y=12
C/Y=12
PMT: END BEGIN

Using the TVM (Time Value Money) Solver ...
Total Number of payments to the account
(#years in account)(#times payments/year)
N=36
Annual Interest
I%=5.75
rate as a percent
PV=-4500
PMT=0
FV=5345.02
P/Y=12
C/Y=12
PMT: END BEGIN

Using the TVM (Time Value Money) Solver ...
Total Number of payments to the account
(#years in account)(#times payments/year)
N=36
Annual Interest
I%=5.75
rate as a percent
Present Value
PV=-4500
of the account
PMT=0
FV=5345.02
P/Y=12
C/Y=12
PMT: END BEGIN

Using the TVM (Time Value Money) Solver ...
Total Number of payments to the account
(#years in account)(#times payments/year)
N=36
Annual Interest
I%=5.75
rate as a percent
Present Value
PV=-4500
of the account
PayMenTs made PMT=0
to the account Future Value
FV=5345.02
of the account
P/Y=12
C/Y=12
PMT: END BEGIN

Using the TVM (Time Value Money) Solver ...
Total Number of payments to the account
(#years in account)(#times payments/year)
N=36
Annual Interest
I%=5.75
rate as a percent
Present Value
PV=-4500
of the account
PayMenTs made PMT=0
to the account Future Value
FV=5345.02
of the account
Number of Payments P/Y=12
C/Y=12
made per Year Number of Compounding
PMT: END BEGIN periods per Year

Using the TVM (Time Value Money) Solver ...
You invest $4500.00 at 5.75% interest compounded monthly.
How much money will you have at the end of three years?
Total Number of payments to the account
(#years in account)(#times payments/year)
N=36
Annual Interest
I%=5.75
rate as a percent
Present Value
PV=-4500
of the account
PayMenTs made PMT=0
to the account Future Value
FV=5345.02
of the account
Number of Payments P/Y=12
C/Y=12
made per Year Number of Compounding
PMT: END BEGIN periods per Year
PMT: Depends on when payments are made
each compounding period, we usually use END
[ALPHA] [SOLVE]

What's the difference?
N= N=
I%= I%=
PV= PV=
PMT= PMT=
FV= FV=
P/Y= P/Y=
C/Y= C/Y=
PMT: END BEGIN PMT: END BEGIN

Solve for N (the number of payments) ...
To buy a new car you must take out a loan of $10 593.30. You can
afford a payment of $238 per month. The dealership offers you an
annual interest rate of 3.75% compounded monthly.
How many payments must you make?
How much interest have you paid?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN

Solve for I (the rate of interest) ...
A certain university program will cost $20 000. What annual
interest rate, compounded monthly, must you obtain if you can
save $288.50 per month for the next five years and hope to have
all the money saved by that time?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN

Solve for PV (the value now) ...
You plan to buy a car. You can make monthly payments of $525
and the interest rate advertised for car loans is 6.25%,
compounded monthly. If the dealership is offering you financing for
two years how much car can you afford?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN

Solve for FV (the future value) ...
You decide to invest $6500. The bank offers an interest rate of
8.25% compounded annually. What will your money be worth in 7
years if the interest rate remains unchanged?
HOMEWORK
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN

HOMEWORK
Watching Money Grow ...
N=
Calculate the final balance I%=
if $7500 were invested at PV=
8% per year, compounded PMT=
semi-annually for 6 years. FV=
P/Y=
C/Y=
PMT: END BEGIN
How long will it take $12 000
N=
invested at 7.2% per year,
I%=
compounded quarterly, to
PV=
grow to $15 000?
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN

Investing Regularly ... HOMEWORK
N=
Calculate the final balance if $1500 were
I%=
invested at 8% per year, compounded semi-
PV=
annually, with additional investments of $1 000
PMT=
at the end of every six months for five years.
FV=
P/Y=
C/Y=
PMT: END BEGIN
How long will it take to save $35 000, if $2 500 N=
were invested at 7.2% per year, compounded I%=
quarterly, followed by an additional $400 at the PV=
end of each 3-month period? PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN