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Ex: TI84 TVM Solver - Future Value with Compounded Interest - YouTube
Channel: Mathispower4u
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in this lesson we'll look at two
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examples of determining future value
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when an account pays compounded interest
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using the ti-84 tvm solver in this first
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example
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you deposit two thousand dollars in an
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account earning six percent interest
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compounded annually how much will you
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have in the account in 15 years to
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access the tmv solver we press the apps
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button here
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we want this first option finance so we
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press enter
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we also want this first option tvm
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solver so we press enter again
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and now we'll enter all the values that
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we know and we'll come back to the
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future value the value we're trying to
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find
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n represents the total number of
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compounds over the total time period and
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because the interest is compounded
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annually or one time per year for 15
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years
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n is 15.
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so 15
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enter
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the interest rate as a percentage is six
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percent so we enter six not point zero
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six the percent as a decimal
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the present value in the account is two
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thousand dollars the amount you had to
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pay
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so the present value is going to be
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negative two 2000
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and the amount we have to pay is going
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to be negative
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there's no regular payment so payment
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will stay zero
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we're trying to find the future value so
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we'll skip this for now
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and because we have interest compounded
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annually we want the payments per year
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and compounds per year both to be one
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and we'll leave this last option for
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payment as end now we go back up to the
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future value here and press alpha enter
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so we can solve for the future value so
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we press alpha enter
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notice how the calculator puts this
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square here on the far left indicating
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this is the value that we solve for
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the future value to the nearest cent
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will be 4793.
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and 12 cents
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so the account balance after 15 years is
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4793 dollars and 12 cents
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let's look at our second example
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here you deposit two thousand five
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hundred dollars
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in an account that pays 5.5 percent
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annual interest compounded monthly
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how much will there be in the account
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after one year two years and five years
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so first determine the amount after one
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year
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so we'll go back up to n the total
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number of compounds
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because it's compounded monthly
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for one year
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n would be one times 12 or 12
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for this first answer
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so 12 enter
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the annual interest rate is 5.5 so we
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enter 5.5
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enter
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the initial deposit is 2 500 so the
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present value is negative two thousand
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five hundred again because we had to pay
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this amount
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there are no additional payments so the
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payment stays at zero
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we'll come back to future value the
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value we're trying to find
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but now here because we have
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interest compounded monthly we'll set
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payments per year and compounds per year
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to 12.
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now if we enter 12 for payments per year
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and press enter it automatically changes
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the compounds per year
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and we'll leave this last row on end
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now we'll go back up to future value
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and to solve for this we press alpha
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enter
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so after one year the account balance is
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2 641
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and 2 cents let's go ahead and write
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this down
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and now we'll find the account balance
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after two years to do this
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we simply change n again because we have
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interest compounded monthly now for two
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years n would be 2 x 12 or 24
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so we'll change n to 24
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press enter
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everything else remains the same so we
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go back down to future value and press
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alpha enter
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and now the new account balance of two
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years
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is going to be 27899.99
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to the nearest cent
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and then finally we'll find the account
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balance after five years
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so we just have to change n again again
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because we have interest compounded
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monthly for a total of five years
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n is going to be five times 12 or 60 we
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can just enter five times 12.
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press enter and it will calculate that
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value for us we'll go back down to
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future value
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and press alpha enter
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to determine the account balance after
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five years which is
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3289 dollars and 26 cents
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this is how we use the tmv solver on the
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ti-84 when we're trying to determine
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future value of an account that pays
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compounded interest i hope you found
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this helpful
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