Present Value of Annuity Due Using Financial Calculator? - how to solve for rate of return with annuity equation
I want a question that offers a bit of a solution, but I can not find what I need in my financial calculator, which I have the same answer will punch.
1. His cousin had just come home from a poker tournament in Las Vegas and is now trying to
pay gambling debts of $ 5,000. They decided to pay the debts it today
and instead to pay $ 250 per month for the next two years
Payments from the immediate. What is the annual interest rate is effective
was charged?
A) 19.75%
B) 19.86%
C) 21.77%
D) 22.26%
E) 23.45%
Answer C
5000 = 250 x PVIFA (I, 24) x (1 + i) because it is a pension
I use the free financial calculator: i = 1.6550%
EAR = (1 + im) m -1 = (1.01655) 12-1 = 21.77%
If the answer is always, but I can not understand how to fix it myself with a financial calculator.
Friday, February 19, 2010
How To Solve For Rate Of Return With Annuity Equation Present Value Of Annuity Due Using Financial Calculator?
1 comment:
Hey, I same test on Sunday:
You should change your computer to start the calculation of I / Y to a pension .. Do not forget to (sign -) the present value (-5000)
To change this setting to start mode:
To change the startup mode, press 2 PMT. You should see on the screen saying END. Now, 2, press the Enter key to change it to BGN, and finally, press 2 to leave for the calculation of the configuration CPT.
.. Good luck! ;)
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