sir i like the way you explain the tvm and logic behind the formulas... i really want to learn from your videos, so can you please tell the place where i can find the next video... please help me out
sir, I have a doubt. what is the stated annual rate or stated annual yield? when periodicity (increases) EAR (increases) SAR (keeping constant). when periodicity (increases) SAR (decreases) EAR (keeping constant). Help me sir four days I am in this confusion.
Eric Keener's father has promised to give him $1,000 each year for the next three years. A bank deposit pays 5 percent compounded semi-annually. How much money will Eric have at the end of three years if he invests in the bank? Assume the money (the $1,000 from his father) will be received at the end of each year. a. $3,154.43 b. $2,859.41 c. $4,000.00 d. $2,723.24 e. None of the above is within $1.00 of the correct answer. I m trying = pmt=1000, I/Y=5%/2, N=3*2, CPT FV there are examples where you divided the interest rate with compounding and multiplied the compoundings with N. if i try this question with converting nominal to effective iam getting correct answer. now iam confused in what scenario we multiply the compounding with N and in what scenario we have to take EFFECTIVE RATE APPROACH
go to the cash flow function cf0=0 cf1=1000 f1=3 i (calculate the effective annual rate first)=5.0625 go to nfv(*available only for professional version calculator) cpt ans=3154.4 using tvm pmt=1000 i/y=effective annualrate=5.0625(*this is the catch of the question) n=3 cpt fv ans=3154.4
I m trying with two methods- Method 1- PMT=1000, I/Y=5%/2, N=3*2, CPT FV Method 2- convert 5% nominal rate to effective rate 5.06% and then PMT=1000, I/Y=5.06%, N=3, CPT FV There are examples where we used method 1 i.e. divide the interest rate with compounding that is 5%/2=2.5% and multiply the compounding with N that is N=3*2=6. This is giving me incorrect answer If I use method 2 I am getting correct answer. I am confused in what scenario we use method1 and in what scenario we can use method 2???
