I am trying to figure out how to put this in my calculator, and I don’t know what I am doing wrong.
I put in:
N=14
I/Y=8.5
PV=0
PMT=-900
and the FV comes out to be wrong… Please help! =)
future value of an annuity due that pays $900/yr for 14yrs? Use nominal rate (monthly compounding) of 8.5%?
07
Mar
mule
March 7, 2010 at 11:40 am
Future Value = $24,070
edit: what you’re doing wrong is you need to convert everything to a monthly basis, since the interest is compounded monthly.
i.e. try:
n=168 months (14 x 12)
i = .70833 (8.5% / 12)
pmt = 75 per month (900 / 12)