- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Using TVM on Financial Calculator
Posted on 8/4/15 at 10:49 am
Posted on 8/4/15 at 10:49 am
I'm embarrased to say I can't seem to figure this out.
Anyways; here's the situation. I want to calculate a simple interest annual rate of return of 2% over a 3 year period.
The initial loan amount is $3,200, and payments will be monthly. I can't seem to remember exactly how to adjust the P/Y, I/Y, & N to get the right numbers.
Again, I don't want to RoR to be compounded or amortized. Just a level payment 2% RoR on the initial outlay. Before you jump on me, this is a below market rate loan for family.
Thanks folks.
Anyways; here's the situation. I want to calculate a simple interest annual rate of return of 2% over a 3 year period.
The initial loan amount is $3,200, and payments will be monthly. I can't seem to remember exactly how to adjust the P/Y, I/Y, & N to get the right numbers.
Again, I don't want to RoR to be compounded or amortized. Just a level payment 2% RoR on the initial outlay. Before you jump on me, this is a below market rate loan for family.
Thanks folks.
Posted on 8/4/15 at 10:49 am to Cmlsu5618
It shouldn't matter, but I'm using a BA II Plus.
I also know that I can simply take 2% X $3,200 and do some basic arithmetic. But I'd like to refresh myself on how to use TVM if anyone can help.
I also know that I can simply take 2% X $3,200 and do some basic arithmetic. But I'd like to refresh myself on how to use TVM if anyone can help.
This post was edited on 8/4/15 at 10:53 am
Posted on 8/4/15 at 10:56 am to Cmlsu5618
Use 2/12 for I/Y
Use 3*12 for N
There are other ways to do it, but that's the simplest.
Use 3*12 for N
There are other ways to do it, but that's the simplest.
Posted on 8/4/15 at 12:09 pm to southernelite
That brings PMT to 91.50.
36 PMTs of 91.50 is a total P&I of 3,294. In that scenerio the RoR is 2.94% over the 3 year period, which is right under 1% annually.
I'm missing something here.
ETA:
So I used 6%/12 as the i/y since I'm looking for the 2% average annual return. The APR still comes out right under 3%. I'm assuming the TVM is just compounding?
36 PMTs of 91.50 is a total P&I of 3,294. In that scenerio the RoR is 2.94% over the 3 year period, which is right under 1% annually.
I'm missing something here.
ETA:
So I used 6%/12 as the i/y since I'm looking for the 2% average annual return. The APR still comes out right under 3%. I'm assuming the TVM is just compounding?
This post was edited on 8/4/15 at 12:18 pm
Posted on 8/4/15 at 1:05 pm to Cmlsu5618
The effective will be different. 2% APR compounded monthly.
Posted on 8/4/15 at 1:08 pm to southernelite
If you just 2% compounded annually just put
I/Y - 2
N - 3
That should get you where you're going.
I may have misunderstood what you were going for the first time.
I/Y - 2
N - 3
That should get you where you're going.
I may have misunderstood what you were going for the first time.
Posted on 8/4/15 at 1:31 pm to southernelite
quote:
If you just 2% compounded annually just put
I/Y - 2
N - 3
That should get you where you're going.
Also make sure P/Y is 1 in that situation correct?
Posted on 8/4/15 at 1:43 pm to yellowhammer2098
Correct me if I'm wrong, but the i/y would need to be 6, not 2, if I wanted an annual RoR to be ~2%.
Posted on 8/4/15 at 2:57 pm to Cmlsu5618
The formula I gave will give you an effective rate of 2%
This post was edited on 8/4/15 at 3:22 pm
Posted on 8/4/15 at 3:10 pm to yellowhammer2098
Yeah, I usually divide the interest by the number of periods compounded and multiply the N by the same number instead of change the I/Y so I never change the settings of my calcutor
Posted on 8/4/15 at 3:39 pm to southernelite
I don't think I'm explaining this correctly. Let's say I use your info..
n: 3
i/y: 2
pv: -3,200
fv: 0
P/Y: 1
Calculate PMT= 1,087.86
Multiply the annual payment by three years, and you get a total P&I of 3,263.57, which means positive net interest of 63.57.
63.57 of interest is 2% of the original loan, but that is a 0.66% annual rate of return. That's why i/y has to be 6% to get an annualized ~2% return.
When i/y is 6%, you get annual payments at 1,129.39, or $3,388.16 of total P&I. Positive net interest of 188.16 which is right around 2% when annualized ($62.72 each year). Correct me if I'm wrong.
n: 3
i/y: 2
pv: -3,200
fv: 0
P/Y: 1
Calculate PMT= 1,087.86
Multiply the annual payment by three years, and you get a total P&I of 3,263.57, which means positive net interest of 63.57.
63.57 of interest is 2% of the original loan, but that is a 0.66% annual rate of return. That's why i/y has to be 6% to get an annualized ~2% return.
When i/y is 6%, you get annual payments at 1,129.39, or $3,388.16 of total P&I. Positive net interest of 188.16 which is right around 2% when annualized ($62.72 each year). Correct me if I'm wrong.
This post was edited on 8/4/15 at 3:43 pm
Posted on 8/4/15 at 4:29 pm to Cmlsu5618
~62/3 = 21
3200/3 = 1066
21/1066 = ~2%
3200/3 = 1066
21/1066 = ~2%
Posted on 8/5/15 at 10:25 am to southernelite
I'm still not seeing it. Why would you divide the annual interest by 3? That's not total interest.
For the record, it wasn't my downvote.
For the record, it wasn't my downvote.
Posted on 8/5/15 at 10:34 am to Cmlsu5618
You're right, I just got confused. I compounded 3 times for each year, whereas you didn't compound any. Just an assumption I made that wasn't what you were looking for.
This post was edited on 8/5/15 at 10:45 am
Popular
Back to top
Follow TigerDroppings for LSU Football News