In this example, you want to find out how many years (N) it will take for a $500 investment (PV) to grow to $1,000 (FV), given that we can earn 7% annually (I/Y) on your money.
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I/Y = 7, PV = -500, FV = 1,000; CPTN = 10.24 years.
c: Calculate the FV and PV of an regular annuity and an annuity due.
Calculate the FV of an ordinary annuity:
Example:Find the FV of an ordinary annuity that will pay $150 per year at the end of each of the next 15 years, given the investment is expected to earn a 7% rate of return.
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N = 15, I/Y = 7%, PMT = $150; CPTFV = $3,769.35(ignore the sign).
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Calculate the FV of an annuity due:
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Example:Find the FV