Deferred Perpetuity PV
Exercise ID: tvm-real-013
Description
An investment pays $1,000 per year forever, with the first payment occurring 4 years from today. Discount rate is 5%. Calculate PV.
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 = 3
Key Sequence:
Before Key Press:
0.00
After Key Press:
3
⏱ 1200ms
Step 3:Store in N
Key Sequence:
Before Key Press:
3
After Key Press:
N=3.00
⏱ 1000ms
Step 4:Input I/Y = 5
Key Sequence:
Before Key Press:
N=3.00
After Key Press:
5
⏱ 1200ms
Step 5:Store in I/Y
Key Sequence:
Before Key Press:
5
After Key Press:
I/Y=5.00
⏱ 1000ms
Step 6:Input PMT = 0
Key Sequence:
Before Key Press:
I/Y=5.00
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 = 20000
Key Sequence:
Before Key Press:
PMT=0.00
After Key Press:
20000
⏱ 2000ms
Step 9:Store in FV
Key Sequence:
Before Key Press:
20000
After Key Press:
FV=20000.00
⏱ 1000ms
Step 10:Compute PV
Key Sequence:
Before Key Press:
FV=20000.00
After Key Press:
PV=-17276.75
⏱ 1500ms
- 1.Discounting back 4 years instead of 3 (Perpetuity formula gives value at t-1)
- 2.Using N=infinity (not possible on calculator)
- 3.Forgetting the two-step process
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