Join Jim Stice for an in-depth discussion in this video Practicing using business calculators and Excel, part of Using the Time Value of Money to Make Financial Decisions.
- Let's practice using a business calculator…and an Excel spreadsheet.…Now, you shouldn't view this as a spectator exercise.…Find yourself a business calculator…an Excel spreadsheet, some sort of online template,…or use your telephone.…Practice along with me with some sort of device.…Let us suppose that I'm going to invest $100…at an interest rate of 5% compounded annually.…I want to know how much my investment…will be worth in the future.…With my business calculator…I will do the following steps:…First, of course, I would clear my calculator's memory.…
Then I would press -100 and hit PV…to input that number into the calculator.…This is the value of my investment today.…The minus sign, the negative sign,…indicates that I'm paying $100 out of my pocket.…In terms of keystroke order, most business calculators…have you input 100 and then hit the minus key.…Press 5 and hit the interest rate key.…This is the interest rate.…Then press 1 and hit N.…My investment is for just one year.…And finally, press FV.…
This will tell me what my investment will be worth…
Released
4/6/2015Learn more about interest rates and investments in the Stices' Finance Fundamentals course.
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Video: Practicing using business calculators and Excel