Question

In your answers, you should properly show your work by writing down your entries into the calculator. For instance, if you use the TVM worksheet of your financial calculator to compute how long it takes to double your account balance given 5% annual interest rate, you should write down your entries as: I/Y=5, PV=-1, PMT=0, FV=2, CPT N=? --- the question mark here stands for your answer to the question.

Question 1 - Basic Setting [2 points] Change the number of decimal places from 2 to 4.

Question 2 - Basic Setting [2 points] Explain the difference between the two calculation methods: Chn and AOS.

Question 3 - TVM Worksheet – compute FV [2 points] Suppose you deposit $6,000 today in a savings account that pays 0.5 percent annual interest. How much will you have in your account in 20 years?

Question 4 - TVM Worksheet – compute PV [2 points] How much money must you deposit in a savings account that pays 0.5 percent annual interest in order to have $6,000 in 20 years?

Answer 1