HP 10bII

Value of a Taxable Retirement Account
This problem uses the TVM application to calculate the future value of a
taxable retirement account that receives regular, annual payments
beginning today (Begin mode). The annual tax on the interest is paid out
of the account. (Assume the deposits have been taxed already.)
Example. If you invest $3,000 each year for 35 years, with dividends
taxed as ordinary income, how much will you have in the account at
retirement? Assume an annual dividend rate of 8.175%, a tax rate of 28%,
and that payments begin today. What is the purchasing power of that
amount in today’s dollars, assuming 4% inflation?
Set to Begin mode. Press QE if BEGIN annunciator is not displayed.
Keys: Display: Description:
Oe
1.00
Sets
1
payment
per
year.
QON 35.00 Stores number of
payment periods until
retirement.
GXCDCXSO 5.89 Calculates interest rate
[Gol diminished by tax rate.
Ge 5.89 Stores adjusted interest
rate.
Ow 0.00 Stores amount you are
starting with.
COCO] -3,000.00 Stores amount of
annual payment.
(Ev)
345,505.61
Calculates
amount
in
account
at
retirement.
[Cy a) 2727) -87,556.47 Calculates present-
value purchasing power
of FV; assuming a 4%
inflation rate.
112 8: Additional Examples