Question

i am using the tvm solver on the ti-84 plus. please do not use any formulas solved by hand to solve the problem. i am just needing to know what i need to plug in where on the tvm solver app, and why. i have the answer already, which is $124,622. thanks in advanxe

2) Mr. Jones would like an income of $10,000 per year, paid at the end of each year for 20 years. How much must he invest now into an account earning 5 % interest per year, compounded annually, in order to obtain this income? Assume the account will be empty after the last payment is made.

Answer 1

Answer-
Cash outflow every year = $ 10,000
Rate of Interest = 5%
Amount to be invested today will be the present value of future outflows, calculated as under
No. Of years =20
Year	Cash outflow (a)	PV factor (b)	PV( c= a/b)
1	$              10,000	1.05000	$      9,523.81
2	$              10,000	1.10250	$      9,070.29
3	$              10,000	1.15763	$      8,638.38
4	$              10,000	1.21551	$      8,227.02
5	$              10,000	1.27628	$      7,835.26
6	$              10,000	1.34010	$      7,462.15
7	$              10,000	1.40710	$      7,106.81
8	$              10,000	1.47746	$      6,768.39
9	$              10,000	1.55133	$      6,446.09
10	$              10,000	1.62889	$      6,139.13
11	$              10,000	1.71034	$      5,846.79
12	$              10,000	1.79586	$      5,568.37
13	$              10,000	1.88565	$      5,303.21
14	$              10,000	1.97993	$      5,050.68
15	$              10,000	2.07893	$      4,810.17
16	$              10,000	2.18287	$      4,581.12
17	$              10,000	2.29202	$      4,362.97
18	$              10,000	2.40662	$      4,155.21
19	$              10,000	2.52695	$      3,957.34
20	$              10,000	2.65330	$      3,768.89
Total			$ 1,24,622.10
Amount he should invest now is $ 1,24,622.10