Neely Neel Neel Neelerson,
--> APPS
--> TVM
Viola. The initials TVM stand for Time-Value-Money; it's a widely used tool throughout financial mathematics. If you are looking to deal with annuities, bonds, present value equations, future value equations, or even certain stocks then you will want to use the TVM app within your TI-84.
When you go into that menu screen you will see about 10 input lines; and despite how you're being taught you'd be best off using only five (from a mathematical & conceptual standpoint). The backbone of the TVM is the time-zero equation of value. So, all you want to be touching is the N, I/Y, PV, PMT, and FV keys.
Background on TVM:
N = Number of intervals
I/Y = Effective Interest Rate Per Interval (5% is .05 but the computer wants it entered as 5.0)
PV = The Present Value
PMT = Recurring Payment (either deposit or withdrawal)
FV = Future Value
There are like 3 other inputs that I encourage you to ignore (in exchange for learning exactly what's going on within this application).
NOTE: You MUST make your effective interest term match your number of intervals. For example, an annuity with monthly payments for 5 years with a monthly effective interest rate of 2% would need an N value of 60 (which is 12 months per year times 5 years for a total of 60 months).
There's more that could be said, but I think this should help you find the PV of an annuity.
Go Bulls,
The Math Cheetah
[email protected]
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