User`s guide

Time Value of Money Calculations

This solution requires four steps:

1. Calculate the present value of the 47 monthly payments: (4 × 12) - 1 = 47.

2. Add the value of the additional advance payment.

3. Find the present value of the buy option.

4. Sum the values calculated in steps 2 and 3.

Step 1

Find the present value of the monthly payments.

Set to Begin mode. Press \¯ if BEGIN annunciator is not displayed.

Step 2

Add the additional advance payment to PV. Store the answer.

Step 3

Find the present value of the buy option.

Table 6-13 Calculating the present value

Keys Display Description

JG\Í

12.00 Sets payments per year.

YjÙ

47.00 Stores number of payments.

GY::yÌ

-2,400.00 Stores monthly payment.

:É

0.00 Stores FV for Step 1.

dÒ

9.00 Stores interest rate.

95,477.55 Calculates the present value of

47 monthly payments.

Table 6-14 Adding the advance payment

Keys Display Description

1vÌy4

97,877.55 Adds additional advance.

payment

97,877.55 Stores result in M register.

Table 6-15 Calculating the present value of the last cash flow

Keys Display Description

YgÙ

48.00 Stores month when buy option

occurs.