Present Value of a Lump Sum
Exercise ID: tvm-real-002
Description
A client requires $100,000 in 5 years to fund a business expansion. If they can earn a 6% annual return compounded monthly, how much must they invest today?
Given Values
Objective
Calculate PV
Steps
Total 10 stepsStep 1:Clear TVM Registers
💡 Always clear TVM before starting a new problem.
Key Sequence:
Before Key Press:
0.00
After Key Press:
0.00
⏱ 1500ms
Step 2:Input N = 60
Key Sequence:
Before Key Press:
0.00
After Key Press:
60
⏱ 1400ms
Step 3:Store in N
Key Sequence:
Before Key Press:
60
After Key Press:
N=60.00
⏱ 1000ms
Step 4:Input I/Y = 0.5
Key Sequence:
Before Key Press:
N=60.00
After Key Press:
0.5
⏱ 1600ms
Step 5:Store in I/Y
Key Sequence:
Before Key Press:
0.5
After Key Press:
I/Y=0.50
⏱ 1000ms
Step 6:Input PMT = 0
Key Sequence:
Before Key Press:
I/Y=0.50
After Key Press:
0
⏱ 1200ms
Step 7:Store in PMT
Key Sequence:
Before Key Press:
0
After Key Press:
PMT=0.00
⏱ 1000ms
Step 8:Input FV = 100000
Key Sequence:
Before Key Press:
PMT=0.00
After Key Press:
100000
⏱ 2200ms
Step 9:Store in FV
Key Sequence:
Before Key Press:
100000
After Key Press:
FV=100000.00
⏱ 1000ms
Step 10:Compute PV
Key Sequence:
Before Key Press:
FV=100000.00
After Key Press:
PV=-74137.22
⏱ 1500ms
- 1.Using annual N (5) instead of monthly (60)
- 2.Using annual I/Y (6) instead of monthly (0.5)
- 3.Confusing PV and FV directions
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