IMPORTANT: Please set P/Y =1 and C/Y = 1 for the examples in this video:
Press 2nd P/Y (I/Y) = 1 ENTER, 2nd QUIT (CPT)
For examples that require changing P/Y and C/Y, please see the following playlist:
• BA II Plus Calculator
Calculating Bond Price: • Calculating Bond Value (Price) | Form...
Compound Interest in Excel: • Solved: Compound Interest Problems in...
Problems Solved (Compiled by Andrew Rossman):
Example 1: Laura takes a 15year, $500 000 mortgage, on a new condo. At an interest rate of 4% (that is compounded monthly), what is the monthly payment?
Example 2:Helene is planning ahead for her daughter Paula’s college tuition. Paula begins college in 5 years and will need $80,000. How much would Helene have to invest today at 6% compounded annually to have $80,000 in 5 years?
Example 3: Josh has an investment account with $50,000. If Josh earns 6% per year and contributes $400 each month, how much will his investments be worth in 10 years?
Example 4: Steven has $25,000 in credit card debt. His credit card charges 2% in monthly interest and Steven pays $1,000 each month toward the balance. If Steven doesn’t make any further purchases, how many months will it take to fully repay his debt?
Example 5: Martin’s savings account has $25,000 today. In 5 years, the account is worth $32,000. What is the annual interest rate?
00:00 Intro
01:24 Ex1Find Payment
03:11 Ex2Find PV
04:19 Ex3Find FV
05:27 Ex4Find N
06:23 Ex5Find I/Y