In: Finance
Calculate the accumulated amount of annunity with depositis of $750 monthy at 5% for 20 years. Discuss how the accumlated amount would change if the monthly deposits was decreased.
Working out both future value of annuities and present value of annuities; The decreasing value is not mentioned so, showed working for decreased value with $50 variation from $750 to $500:
Using financial calculator BA II Plus - Input details: |
# = 750 |
Decreased to 700 |
Decreased to 650 |
Decreased to 600 |
Decreased to 550 |
Decreased to 500 |
I/Y = Rate/Frequency = |
0.416667 |
0.416667 |
0.416667 |
0.416667 |
0.416667 |
0.416667 |
PMT = Payment or Coupon or Regular payments / Frequency = |
-$750.00 |
-$700.00 |
-$650.00 |
-$600.00 |
-$550.00 |
-$500.00 |
N = Total number of periods = |
240.00 |
240.00 |
240.00 |
240.00 |
240.00 |
240.00 |
PV = Present Value = |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
CPT > FV = Future Value = |
$308,275.25 |
$287,723.57 |
$267,171.88 |
$246,620.20 |
$226,068.52 |
$205,516.83 |
..
.
Using financial calculator BA II Plus - Input details: |
# = 750 |
Decreased to 700 |
Decreased to 650 |
Decreased to 600 |
Decreased to 550 |
Decreased to 500 |
I/Y = Rate or yield / frequency of coupon in a year = |
0.416667 |
0.416667 |
0.416667 |
0.416667 |
0.416667 |
0.416667 |
PMT = Coupon rate x FV / frequency = |
-$750.00 |
-$700.00 |
-$650.00 |
-$600.00 |
-$550.00 |
-$500.00 |
N = Number of years remaining x frequency = |
240.00 |
240.00 |
240.00 |
240.00 |
240.00 |
240.00 |
FV = Future Value = |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
CPT > PV = Present value = |
$113,643.98 |
$106,067.72 |
$98,491.45 |
$90,915.19 |
$83,338.92 |
$75,762.66 |