Need some basic math help.. - Posted by Prodigy

Real Estate Investing
1

Posted by John Behle on August 07, 2007 at 23:05:40:

You’re welcome, Have a great day.

2

Need some basic math help… - Posted by Prodigy

Posted by Prodigy on August 07, 2007 at 05:58:28:

I have a Real Estate Master IIIx and am trying to solve the following 2 problems:

  1. What is the balance in a savings account at the end of a ten-year period with regular quarterly deposits of $250 made at the beginning of each period at 9% compounded quarterly?

  2. What is the present worth of $15,000 to be received in ten years from today at a discount rate of 9 percent compounded annually?

*** For problem #2, I ran some #'s and got 2 different answers. Here’s what I did.

[15,000] [shift] [Loan Amt/FV]
[9] [Int]
[10] [Term]
I then pressed the [Loan Amt] key to get the answer for PV:
$6,159.69

I did the same thing again, but this time I used [120] for [Term] instead of [10] My answer was:
$1,038.71

For some reason, I believe both of my answers are incorrect.

How do I solve these problems using my calculator?

Thanks all…

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Re: Need some basic math help… - Posted by John Behle

Posted by John Behle on August 07, 2007 at 21:49:15:

For the first question I get the answer of $15,946.54. I have no idea about the steps on a Real Estate Master. I have never owned one and only seen one a few times. I worked the problem on my HP12C since it was handy. With the 12C, I put in 40 as the N, 250 as the PMT, -0- as the PV and 9/4 or 2.25 as the I.

I did this because we are dealing with a periodic rate and a periodic cash flow where it is payable or compounded 4 times a year. So, the term of ten years is multiplied by 4 and the rate of 9% is divided by 4.

For the second question, the answer I get is $6336.16. Again, this is a periodic scenario, though the period is yearly. So, I entered $15,000 as the FV, 9 as the I, 10 as the N and -0- as the payment.

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Re: Need some basic math help… - Posted by Tom Henderson

Posted by Tom Henderson on August 12, 2007 at 15:25:09:

Hello John,
I was in the John Berven class with you in Salt Lake City, and traded that course to you for one of yours. Glad to see you are healthy again.

I came up with a different answer than you on the first problem. We differed in I put my calculator in the BEGIN MODE, because the $250 was being deposited at the start of the quarter not the end. I came up with $16,305.34, using my handy dandy, portable dash board HP 19B.

Maybe I did not understand the problem.

Tom Henderson
H&P Capital Investments LLC

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Re: Need some basic math help… - Posted by Prodigy

Posted by Prodigy on August 07, 2007 at 22:29:00:

Thanks a ton John for answering… Much appreciated…