Introduction to Personal Finance. Using the TVM solver on the TI-83, TI-84 calculator to solve 5 different types of problems.

1. Personal Finance

2. Using the TVM Solver ...
N: total number of payments
FV: future value, or accumulated amount
I%: annual interest rate as a percent
P/Y: number of payments per year
PV: present value
C/Y: number of compounding periods per year
PMT: payment each period

3. 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?

4. 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?

5. 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?

6. Solve for PMT (the payment) ...
You want to buy a house and take out a 25 year mortgage of $100 000 at
8%, compounded twice a year (maximum annual compounding periods
by law in Canada).
What are your monthly payments?
How much interest will you have paid?

7. 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?