Texas Instruments BA-20 Profit Manager User Manual - Page 33

Example: Computing Present Value in Annuities, Cost Savings for a Present-Value Ordinary Annuity

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Example: Computing Present Value in Annuities The Furros Company purchased equipment providing an annual savings of $20,000 over 10 years. Assuming an annual discount rate of 10%, what is the present value of the savings using an ordinary annuity and an annuity due? Cost Savings for a Present-Value Ordinary Annuity Cost Savings for a Present-Value Annuity Due in a Leasing Agreement To Set all variables to defaults. Enter number of payments. Enter interest rate per payment period. Enter payment. Press & } ! 10 , 10 - Display RST 0.00 N= 10.00 I/Y= 10.00 20000 S / PMT= -20,000.00 Time-Value-of-Money and Amortization Worksheets 29

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Time-Value-of-Money and Amortization Worksheets
29
Example: Computing Present Value in Annuities
The Furros Company purchased equipment providing an annual savings
of $20,000 over 10 years. Assuming an annual discount rate of 10%, what
is the present value of the savings using an ordinary annuity and an
annuity due?
Cost Savings for a Present-Value Ordinary Annuity
Cost Savings for a Present-Value Annuity Due in a Leasing
Agreement
To
Press
Display
Set all variables to defaults.
& } !
RST
0.00
Enter number of payments.
10
,
N=
10.00
Enter interest rate per
payment period.
10
-
I/Y=
10.00
Enter payment.
20000
S /
PMT=
-20,000.00