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App - H, Accounting Principles

Accounting Principles, 11th Edition by Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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H.R. Robin
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76 views8 pages

App - H, Accounting Principles

Accounting Principles, 11th Edition by Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Uploaded by

H.R. Robin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Prepared by

Coby Harmon
University of California, Santa Barbara
Westmont College

H-1
Appendix
Using Financial
H Calculators
Learning Objectives
After studying this chapter, you should be able to:

[1] Use a financial calculator to solve time value of money problems.

H-2
Using Financial Calculators

Illustration H-1
Financial calculator keys
N = number of periods
I = interest rate per period
PV = present value
PMT = payment
FV = future value

H-3 LO 1 Use a financial calculator to solve time value of money problems.


Present Value of a Single Sum

Illustration: Assume that you want to know the present value


of $84,253 to be received in five years, discounted at 11%
compounded annually.
Illustration H-2
Calculator solution for
present value of a single sum

H-4 LO 1 Use a financial calculator to solve time value of money problems.


Present Value of an Annuity

Illustration: Assume that you are asked to determine the


present value of rental receipts of $6,000 each to be received
at the end of each of the next five years, when discounted at
12%. Illustration H-3
Calculator solution for
present value of an annuity

H-5 LO 1 Use a financial calculator to solve time value of money problems.


Useful Applications for Financial Calculators

Auto Loan
Illustration: The loan has a 9.5% nominal annual interest rate,
compounded monthly. The price of the car is $6,000, and you
want to determine the monthly payments, assuming that the
payments start one month after the purchase.
Illustration H-4

H-6 LO 1 Use a financial calculator to solve time value of money problems.


Useful Applications for Financial Calculators

Mortgage Loan Amount


Illustration: You decide that the maximum mortgage payment
you can afford is $700 per month. The annual interest rate is
8.4%. If you get a mortgage that requires you to make monthly
payments over a 15-year period, what is the maximum purchase
price you can afford?
Illustration H-5

H-7 LO 1 Use a financial calculator to solve time value of money problems.


Copyright

Copyright 2013 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
Request for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and not for
distribution or resale. The Publisher assumes no responsibility for
errors, omissions, or damages, caused by the use of these
programs or from the use of the information contained herein.

H-8

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