Book Report: T.V.M. Solver

Thanks to the internet, this book report will tell you on how to access the T.V.M. on your calculator and give you some examples.

T.V.M stands for Time Value of Money. TVM is based on the idea that money received earlier is worth more than the same amount of money received later.

To get to the T.V.M. solver on your calculator, you press APPS, ENTER, ENTER, and you will get to a screen which shows these following variables:

N= total number of payments
I%= nominal interest rate, expressed as a percent (use 5, for 5%, NOT 0.05)
PV= present value or principal
PMT= amount of each payment (for mortgages and annuities)
FV= future value
P/Y= payments per year
C/Y= compounding periods per year

Here are examples to represent both algebraic and TVM Solver solutions:

1.Solving for Future value: If you deposit $2500 in an account earning 12% interest compounded weekly, how much is it worth in 4 years?
N= 4
I%= 12
PV= 2500
PMT= 0
FV=
P/Y= 1
C/Y= 52

After you have filled in all the numbers, move your curser to FV= and press ALPHA SOLVE (enter) and the number 4037.95 should show up where the FV= is. That’s the final answer for this question.

2.SSolving for present value: How much money must you deposit now, if you need $10000 in 4 years, and can earn 5.5% interest compounded monthly?

Now, we bring up the TVM Solver, set..
N = 4,
I% = 5.5,
PV =
PMT = 0,
FV = 10000,
P/Y = 1,
C/Y = 12.

Move to the present value line and press ALPHA SOLVE (enter). The answer is -8029.22 (the answer is negative, because you have to deposit that amount).

How long does it take $5000 at 8% interest compounded daily to reach a value of $7500?
N =
I% = 8
PV = 5000
PMT = 0
FV = 7500
P/Y = 1
C/Y = 365

Move the cursor to the line for N and press ALPHA SOLVE (enter) to get the answer.