Future Value of Ordinary Annuity
Exercise ID: tvm-real-004
Description
An investor plans to save $2,000 at the end of each year for 20 years. If the account earns an annual return of 7.5%, what is the value at the end?
Given Values
Objective
Calculate FV
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 = 20
Key Sequence:
Before Key Press:
0.00
After Key Press:
20
⏱ 1400ms
Step 3:Store in N
Key Sequence:
Before Key Press:
20
After Key Press:
N=20.00
⏱ 1000ms
Step 4:Input I/Y = 7.5
Key Sequence:
Before Key Press:
N=20.00
After Key Press:
7.5
⏱ 1600ms
Step 5:Store in I/Y
Key Sequence:
Before Key Press:
7.5
After Key Press:
I/Y=7.50
⏱ 1000ms
Step 6:Input PV = 0
Key Sequence:
Before Key Press:
I/Y=7.50
After Key Press:
0
⏱ 1200ms
Step 7:Store in PV
Key Sequence:
Before Key Press:
0
After Key Press:
PV=0.00
⏱ 1000ms
Step 8:Input PMT = -2000
Key Sequence:
Before Key Press:
PV=0.00
After Key Press:
-2000
⏱ 2000ms
Step 9:Store in PMT
Key Sequence:
Before Key Press:
-2000
After Key Press:
PMT=-2000.00
⏱ 1000ms
Step 10:Compute FV
Key Sequence:
Before Key Press:
PMT=-2000.00
After Key Press:
FV=86515.33
⏱ 1500ms
- 1.Using BGN mode instead of END mode
- 2.Entering PMT as positive (resulting in negative FV)
- 3.Confusing PV and PMT
(Expand the sections to view answers and common mistakes before printing.)