Tag Annuities

Time Value of Money – Calculating Lease Payments

This article explains how to calculate lease payments, focusing on equipment leases. It covers basic payment calculations, factoring in residual value and monthly payments. It also explores the complexities of advance payments, where part of the payment is made upfront. The article provides formulas and examples for calculating lease payments both with and without advance payments. For leases with advance payments, it emphasizes how these reduce the total lease amount and payment periods. The tutorial also mentions tools like financial calculators and Excel spreadsheets to simplify the process.

Create Time Value of Money Tables in Excel

Virtually every finance textbook has at the back, a series of tables that contain multipliers that can be used to easily calculate present or future values without the need for a financial calculator. In recent years these tables have given way to financial calculators, but they are still used by some professors and on some professional exams. This tutorial will…

Loan Amortization on the HP 17BII

This tutorial explains how to amortize a fixed-rate loan using the HP 17BII financial calculator. It guides users on calculating the principal and interest for individual payments or a range of payments. The article demonstrates using the calculator’s built-in functions to break down loan payments into principal and interest components and how to determine the remaining balance after each payment. Additionally, it briefly compares this method with using a spreadsheet for creating a full amortization schedule, highlighting the limitations and practical applications of the HP 17BII calculator's amortization functions.

Graduated Annuities on the HP 17BII

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Graduated Annuities on the TI 83 Plus

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Loan Amortization on the HP 19BII

This tutorial explains how to amortize a fixed-rate loan using the HP 19BII financial calculator. It guides users on calculating the principal and interest for individual payments or a range of payments. The article demonstrates using the calculator’s built-in functions to break down loan payments into principal and interest components and how to determine the remaining balance after each payment. Additionally, it briefly compares this method with using a spreadsheet for creating a full amortization schedule, highlighting the limitations and practical applications of the HP 19BII calculator's amortization functions.

Graduated Annuities on the HP 19BII

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

TI 83 and TI 83 Plus Tutorial, Part II

Part 2 of a TI-83 calculator tutorial on calculating money value over time. It covers how to find present and future values of annuities (regular payments) and lump sums using the built-in TVM Solver app. The tutorial explains different annuity types (regular and due) and how to solve for missing variables like payment amount, interest rate, or number of periods. It also touches on perpetuities (infinite payments) and how to approximate their present value with the calculator.

HP 19BII Tutorial, Part II

In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums. In this section we will take a look at how to use the HP 19BII to calculate the present and future values of regular annuities and annuities due. A regular annuity is…

Time Value of Money – Present Value of Regular Annuities

In the previous tutorial, we saw how to calculate the future value of an annuity. Here, we will instead find the present value of a regular annuity. There are many examples where you might want to find the present value of an annuity: A regular annuity is simply an annuity where the first payment is made at the end of…

Time Value of Money – Future Value of Regular Annuities

An annuity is a series of equal cash flows, equally distributed over time. Examples of annuities abound: Mortgage payments, car loan payments, leases, rent payments, insurance payouts, and so on. If you are paying or receiving the same amount of money every month (or week, or year, or whatever time frame), then you have an annuity. A regular annuity is…

Loan Amortization on the HP 10BII+

In this tutorial we will see how to amortize a fixed-rate loan using the HP 10BII+ calculator from Hewlett Packard. Specifically, we will see how to calculate the amount of principal and interest for any particular payment, or range of payments. For example, you may wish to know how much your principal or interest payments will be for the first…

Graduated Annuities on the HP 10BII

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Graduated Annuities on the TI 84 Plus

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Regular Annuity Formulas

These are the main formulas that are needed to work with regular annuity cash flows (Definition/Tutorial). Please note that these formulas work only on a payment date, not between payment dates. This is the same restriction used (but not stated) in financial calculators and spreadsheet functions. I use MathJax to display these formulas. You can click the equations to show…