Then use that PV as the FV on the following cash flow diagram, and calculate the PMT.

Figure 21 Cash flow diagram (Calculate PMT)

Set to End mode. Press \¯if BEGIN annunciator is displayed.

Table 13-22 Calculating the monthly deposit required

KeysDisplay Description

yÉ

52,713.28

Stores amount you need.

 

 

 

 

:Ï

0.00

Stores amount you are starting

 

with.

 

 

 

JG\Í

12.00

Sets payments per year.

 

 

 

 

JYYÙ

144.00

Stores number of deposits.

 

 

 

 

dÒ

9.00

Stores interest rate.

 

 

 

 

Ì

-204.54

Calculates monthly deposit

 

required.

 

 

 

Gains That Go Untaxed Until Withdrawal

You can use the TVM application to calculate the future value of a tax-free or tax-deferred account. (Current tax laws and your income determine whether both interest and principal are tax-free. You can solve for either case.)

The purchasing power of that future value depends upon the inflation rate and the duration of the account.

Example

You are considering opening a tax-deferred account with a dividend rate of 8.175%. If you invest 2,000 at the beginning of each year for 35 years, how much will be in the account at retirement? How much will you have paid into the account? How much interest will you have earned? If your post-retirement tax rate is 15%, what will the after tax future value of the

150 Additional Examples