Solving for Growth Rate (CAGR)
Exercise ID: tvm-real-003
Description
A company’s earnings per share (EPS) increased from $2.50 to $3.80 over a 6-year period. Calculate the compound annual growth rate (CAGR).
Given Values
Objective
Calculate I/Y
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 = 6
Key Sequence:
Before Key Press:
0.00
After Key Press:
6
⏱ 1200ms
Step 3:Store in N
Key Sequence:
Before Key Press:
6
After Key Press:
N=6.00
⏱ 1000ms
Step 4:Input PV = -2.50
Key Sequence:
Before Key Press:
N=6.00
After Key Press:
-2.50
⏱ 2000ms
Step 5:Store in PV
Key Sequence:
Before Key Press:
-2.50
After Key Press:
PV=-2.50
⏱ 1000ms
Step 6:Input PMT = 0
Key Sequence:
Before Key Press:
PV=-2.50
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 = 3.80
Key Sequence:
Before Key Press:
PMT=0.00
After Key Press:
3.80
⏱ 1800ms
Step 9:Store in FV
Key Sequence:
Before Key Press:
3.80
After Key Press:
FV=3.80
⏱ 1000ms
Step 10:Compute I/Y
Key Sequence:
Before Key Press:
FV=3.80
After Key Press:
I/Y=7.23
⏱ 1500ms
- 1.Entering both PV and FV as positive (Error 5)
- 2.Confusing N (number of periods) with years if not annual
- 3.Forgetting to clear previous work
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