+0

# Future Value of an Ordinary Annuity Formula

0
362
5
+47

FV=3,000

i=0.04

PMT=\$600

n=?

Jul 2, 2017

#1
0

OK, PQ: Try the calculator I suggested, and if you have any problems, I will help you. Go ahead!.

Jul 2, 2017
#2
+47
0

i am confused with the calculator :( it isnt commuting the problems correctly

positivityqueen  Jul 2, 2017
#3
0

OK. Open the calculator. Enter 3,000 under FV. Enter .04 x 100=4 under ir. Enter -600(make it negative) under PMT. Enter 0(zero) under PV. Press np key to give you the answer. Tell me what you got.

Jul 2, 2017
#4
0

i got 5.00 and it was correct!!! so how about the word problems which numbers do i plug in each box

Guest Jul 2, 2017
#5
0

Here is our formula. I will assume the payment period is annually..

FV = A(((1+i)^n)-1)/(i)

3000 = 600(((1.04)^n)-1)/(.04)

Let's isolate 'n'

Divide by 600

5 = (((1.04)^n)-1)/(.04)

Multiply by .04

0.2 = (((1.04)^n)-1)

1.2 = (((1.04)^n))

Take log of both sides

ln(1.2) = n*ln(1.04)

Divide by ln(1.04)

(ln(1.2)/ln(1.04)) = n

n = 4.65

Jul 3, 2017