T.V.M Solver Report

www.rrsd.mb.ca/mci/dornn/Files/applied_30s/lesson%202%20-%20TVM%20Solver.doc

T.V.M Meaning Time Value Money, is used to find a missing variable on a calculator (TI-83+) for financial reasons; like time, interest rate, future value, etc.

N- Total number of payment periods
I%- Annual interest rate
PV- The present value, or known as a principal
PMT- Payment amount
FV-Future Value
P/Y- The number of payment periods per year
C/Y- The number of compounding periods per year

When describing, or referring to questions, if we hear the words *Positive Value* That simply indicates the amount of money earned and put into your account; Whereas if we hear the words, *Negative Value* It indicates the amount invested, or taken out of your account.

When Inputting data on a TI-83+, You put in all your information, then highlight your variable you are trying to solve, then press Alpha - Enter

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A quick example, provided by;

www.rrsd.mb.ca/mci/dornn/Files/applied_30s/lesson%202%20-%20TVM%20Solver.doc -

Definitions provided by;

http://dictionary.reference.com/

You Want to buy a new boat. You will need to borrow $9000. to purchase it
a) You find a bank that will give an interest rate (The percentage of a sum of money charged for its use)Combined monthly for over 6 years, what will your monthly payment be...

N- 72
I%- 7.9
PV- 9000
PMT= -157.36 = Payment is $157.36
FV-0
P Y-12
C Y- 12

b) How much interest would you have paid in the end...
72 x 157.36 = 11329.92

11392.92 - 9000 = $ 2329.92

c) If you want to sell your boat after one and half years, how much will you still owe the bank...
N- 18
I%- 7.9
PV- 9000
PMT- -157.36
FV- 7131.64 = After 1.5 years you owe $7131.64
P Y- 12
C Y- 12

d) If you decided to pay an extra $40. per month, when would you have the loan paid off...

N- 54.402953 54 months divide 12 = 4.5 years

= loan is paid off in 4.5 years
I%- 7.9
PV- 9000
PMT- -197.36
FV- 0
P Y- 12
C Y- 12