Time Value of Money Calculations
73
This solution requires four steps:
1. Calculate the present value of the 47 monthly payments: (4 × 12) - 1 = 47.
2. Add the value of the additional advance payment.
3. Find the present value of the buy option.
4. Sum the values calculated in steps 2 and 3.
Step 1
Find the present value of the monthly payments.
Set to Begin mode. Press \¯ if BEGIN annunciator is not displayed.
Step 2
Add the additional advance payment to PV. Store the answer.
Step 3
Find the present value of the buy option.
Table 6-13 Calculating the present value
Keys Display Description
JG\Í
12.00 Sets payments per year.
YjÙ
47.00 Stores number of payments.
GY::yÌ
-2,400.00 Stores monthly payment.
:É
0.00 Stores FV for Step 1.
dÒ
9.00 Stores interest rate.
Ï
95,477.55 Calculates the present value of
47 monthly payments.
Table 6-14 Adding the advance payment
Keys Display Description
1vÌy4
97,877.55 Adds additional advance.
payment
s
97,877.55 Stores result in M register.
Table 6-15 Calculating the present value of the last cash flow
Keys Display Description
YgÙ
48.00 Stores month when buy option
occurs.
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