Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
What would be the proper key strokes on the BA II Plus Financial Calculator by Texas Instrument for the below response?
Transcribed Image Text:Expert Answer
Step 1
Future value of an investment refers to the sum total value of an investment at a certain future
date for all the periodic deposits made into an account by considering the effect of
compounding.
Annuity payments refers to the regular series of payments that are made by an investor into an
investment or deposits made by an account holder with the aim to earn interest rate until the
investment in held.
Step 2
Computation of future value in excel:
By considering all the information provided, we can determine the future value of investment
by using the formula "FV" in excel by putting following values:
Rate=8%/4
Nper=10 * 4
PMT=-500
PV=0
Туре%-D0
The formula is used as :
=FV(8%/4, 10 * 4, –500, 0, 0)
=$30, 200. 99 i. e. $30, 201
Therefore, the future value of investment will be $30,201.
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