HP 40gs HP 39gs_40gs_Mastering The Graphing Calculator_English_E_F2224-90010.p - Page 156

Ordinary compound interest, is 60. The view on the right shows the problem on the calculator.

Page 156 highlights

PMT - This is the size of the periodic payment. The assumptions made are that all payments are the same size and that no payments will be skipped. Payments can occur at the beginning or the end of a compounding period, depending on the setting of Mode. FV - The future value of the investment or loan. This could be the amount in a bank account after a period of years, the residual on a lease, the amount still owing on a loan after N repayments, or the remaining value of an investment which has been paying income as an annuity. When using the aplet is it important to visualize the cash flow in terms of positive cash (inwards) or negative cash (outwards). This can be illustrated simply via the following example. Always bear this principle in mind when deciding how to plan your setup of the aplet. Ordinary compound interest Invest $1000 into a bank account paying 6.5% per annum for 5 years. Interest is calculated monthly and credited to the account at the end of each month. What is the investment worth at the end of the period? Looked at from the point of view of the person investing the money, the cash flow is initially outwards (negative) by $1000. The final payment is inwards (positive) and no payments (withdrawals) are made during the period of the investment. Five years of monthly payments means that N is 60. The view on the right shows the problem on the calculator. The button has been pressed to give a future value FV of $1816.70. Calculator Tip As can be seen above, the designers of this aplet chose to display money to 2 decimal places and using comma separators. This choice is independent of the settings in the MODES view. When entering values do not use commas as they will simply result in a syntax error. 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256
  • 257
  • 258
  • 259
  • 260
  • 261
  • 262
  • 263
  • 264
  • 265
  • 266
  • 267
  • 268
  • 269
  • 270
  • 271
  • 272
  • 273
  • 274
  • 275
  • 276
  • 277
  • 278
  • 279
  • 280
  • 281
  • 282
  • 283
  • 284
  • 285
  • 286
  • 287
  • 288
  • 289
  • 290
  • 291
  • 292
  • 293
  • 294
  • 295
  • 296
  • 297
  • 298
  • 299
  • 300
  • 301
  • 302
  • 303
  • 304
  • 305
  • 306
  • 307
  • 308
  • 309
  • 310
  • 311
  • 312
  • 313
  • 314
  • 315
  • 316
  • 317
  • 318
  • 319
  • 320
  • 321
  • 322
  • 323
  • 324
  • 325
  • 326
  • 327
  • 328
  • 329
  • 330
  • 331
  • 332
  • 333
  • 334
  • 335
  • 336
  • 337
  • 338
  • 339
  • 340
  • 341
  • 342
  • 343
  • 344
  • 345
  • 346
  • 347
  • 348
  • 349
  • 350
  • 351
  • 352
  • 353
  • 354
  • 355
  • 356
  • 357
  • 358
  • 359
  • 360
  • 361
  • 362
  • 363
  • 364
  • 365
  • 366

PMT
-
This is the size of the periodic payment. The assumptions made are that all
payments are the same size and that no payments will be skipped. Payments can
occur at the beginning or the end of a compounding period, depending on the
setting of
Mode
.
FV
-
The future value of the investment or loan. This could be the amount in a bank
account after a period of years, the residual on a lease, the amount still owing on a
loan after
N
repayments, or the remaining value of an investment which has been
paying income as an annuity.
When using the aplet is it important to visualize the cash flow in terms of positive cash (inwards) or negative
cash (outwards). This can be illustrated simply via the following example.
Always bear this principle in mind
when deciding how to plan your setup of the aplet.
Ordinary compound interest
Invest $1000 into a bank account paying 6.5% per annum for 5 years. Interest is
calculated monthly and credited to the account at the end of each month. What is the
investment worth at the end of the period?
Looked at from the point of view of the person investing the money, the
cash flow is initially outwards (negative) by $1000. The final payment is
inwards (positive) and no payments (withdrawals) are made during the
period of the investment.
Five years of monthly payments means that
N
is 60. The view on the right shows the problem on the calculator. The
button has been pressed to give a future value
FV
of $1816.70.
Calculator Tip
MODES
As can be seen above, the designers of this aplet chose to display
money to 2 decimal places and using comma separators. This choice is
independent of the settings in the
view. When entering values
do not use commas as they will simply result in a syntax error.
156