Texas Instruments BA Real Estate - Chapter 3 Finding the Future Value of a Lump Sum; Other Financial

64 Other Financial Tools
BEAR-CH3.DOC BA Real Estate Guidebook Bob Fedorisko Revised: 08/29/96 9:19 AM Printed: 09/28/99 1:21 PM
Page 64 of 20
Steps Keystrokes Display
Clear TVM values.
# -
0.00
Set monthly
compounding
periods.
#
+
12
j j
C/Y = 12.00
12.00
Enter term of
account (in years).
20
0
TRM= 20.00
Enter interest rate
of account.
7
1
I% = 7.00
Enter initial
deposit.*
50
q
t
2
LN =
-
50,000.00
Compute the future
v
alue.
$ 4
FV = 201,936.94
* You are “loaning” the bank $50,000. Since you are paying
the money out, you must make the number negative.
Finding the Future Value of a Lump Sum
When you entered the real estate business, you took a
$50,000 lump-sum distribution from your retirement
program. You want to roll it over into an IRA that yields
7% compounded monthly. What will the account’s value
be in 20 years when you reach age 65?
Solution