LUMPSUMS
–
FUTURE
VALUES
AND
PRESENT
VALUES
Colin
C
Smith
2010
3
*
see
getting
started
1.
Simple
Future
Value
(FV)
You
borrow
R5,000
from
a
friend
at
8%
p.a.
interest
to
be
compounded
annually.
Capital
and
interest
is
repayable
in
5
years
time.
How
much
will
you
repay?
HP10BII
financial
calculator
KEYS
DISPLAY
*Must
not
display
BEGIN
C
ALL
0.00
5,000
+/
‐
PV
‐
5,000.00
8
I/YR
8.00
5
N
5.00
FV
7,346.64
2.
Future
Value
(FV)
with
frequent
compounding
You
have
saved
R10,000
and
invest
this
in
a
fixed
deposit
with
a
bank
at
10.5%
compounded
quarterly
for
4
years.
How
will
you
receive
in
4
years
time?
HP10BII
financial
calculator
KEYS
DISPLAY
*Must
not
display
BEGIN
C
ALL
0.00
10,000
+/
‐
PV
‐
10,000.00
10.5
÷
4
I/YR
2.63
4
x
4
N
16.00
FV
15,137.38
3.
Simple
Present
Value
(PV)
You
have
just
turned
20
years
of
age
and
your
late
Uncle
Scrooge
bequeathed
you
an
amount
of
R5,000
payable
on
your
25
th
birthday.
Your
father
offers
to
give
you
the
present
value
today
in
cash.
At
an
interest
rate
of
10%
p.a.
compounded
annually
how
much
must
your
father
give
you
today?
What
is
the
present
value
of
the
bequest?
The
–ve
amount
reflects
what
should
be
paid
today.
HP10BII
financial
calculator
KEYS
DISPLAY
*Must
not
display
BEGIN
C
ALL
0.00
5,000
FV
5,000.00
10
I/YR
10.00
5
N
5.00
PV
‐
3,104.61
4.
Present
Value
(PV)
with
frequent
compounding
Uncle
George
is
more
generous
and
leaves
you
a
substantial
inheritance.
You
want
to
set
aside
and
amount
to
buy
your
dream
car
when
you
complete
your
trainee
contract
in
5
years
time.
Estimates
are
that
the
dream
car
will
cost
R220,000
at
that
time.
A
bank
is
offering
you
a
5
year
fixed
deposit
at
11.5%
compounded
monthly
for
5
years.
How
much
should
you
invest
today?
The
–ve
amount
reflects
what
should
be
paid
today.
HP10BII
financial
calculator
KEYS
DISPLAY
*Must
not
display
BEGIN
C
ALL
0.00
220,000
FV
220,000.00
11.5
÷
12
I/YR
0.96
5
x
12
N
60.00
PV
‐
124,134.45
