Explanation of the Topic...Present Value of an
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| PVOA= | $2,523.50 | |||||
| $700 | $700 | $700 | $700 | $700 | ||
| ← 1 year → | ← 1 year → | ← 1 year → | ← 1 year → | ← 1 year → | ||
| 1/1/10 | 12/31/10 | 12/31/11 | 12/31/12 | 12/31/13 | 12/31/14 | |
| 0 | 1 | 2 | 3 | 4 | 5 | |
| PVOA = | PMT times [ PVOA factor for n = 5 years; i = ?? per year ] | |
| $2,523.50 = | $700 times [ PVOA factor for n = 5 years; i = ?? per year ] | |
| $2,523.50 / $700 = | [ PVOA factor for n = 5 years; i = ?? per year ] | |
| 3.605 = | [ PVOA factor for n = 5 years; i = ?? per year ] | |
| 3.605 = | PVOA factor for n = 5 years; i = 12% per year |
Investment Account Activity
W/D No. Date Interest Added* Withdrawal Account Balance Jan. 1, 2010 $ 2,523.50 1 Dec. 31, 2010 $ 302.82 $ 700.00 $ 2,126.32 2 Dec. 31, 2011 255.16 700.00 1,681.48 3 Dec. 31, 2012 201.78 700.00 1,183.26 4 Dec. 31, 2013 141.99 700.00 625.25 5 Dec. 31, 2014 75.03 700.00 0.28
*12% times the previous account balance
| PVOA= | $5,616 | |||||||
| $800 | $800 | $800 | $800 | $800 | $800 | |||
| ..... | ||||||||
| ← 3 months → | ← 3 months → | ← 3 months → | ← 3 months → | ← 3 months → | ||||
| 1/1/10 | 4/1/10 | 7/1/10 | 10/1/10 | 1/1/11 | 10/1/11 | 1/1/12 | ||
| 0 | 1 | 2 | 3 | 4 | 7 | 8 | ||
| PVOA = | PMT times [ PVOA factor for n = 8 quarters; i = ?? per quarter ] | |
| $5,616 = | $800 times [ PVOA factor for n = 8 quarters; i = ?? per quarter ] | |
| $5,616 / $800 = | [ PVOA factor for n = 8 quarters; i = ?? per quarter ] | |
| 7.02 = | [ PVOA factor for n = 8 quarters; i = ?? per quarter ] | |
| 7.02 = | PVOA factor for n = 8 quarters; i = 3% per quarter |
Loan Amortization Schedule
(For $5,616.00 at 12% per year with 8 quarterly payments.)
Pmt No. Date Total Payment Interest Payment* Principal Payment** Principal Balance Jan. 1, 2010 $ 5,616.00 1 Apr. 1, 2010 $ 800.00 $ 168.48 $ 631.52 4,984.48 2 July 1, 2010 800.00 149.53 650.47 4,334.01 3 Oct. 1, 2010 800.00 130.02 669.98 3,664.03 4 Jan. 1, 2011 800.00 109.92 690.08 2,973.96 5 Apr. 1, 2011 800.00 89.22 710.78 2,263.17 6 July 1, 2011 800.00 67.90 732.10 1,531.07 7 Oct. 1, 2011 800.00 45.93 754.07 777.00 8 Jan. 1, 2012 800.00 23.31 776.69 0.31
* Interest payment equals 3% of the previous principal balance.
** Principal payment equals $800 minus interest payment.
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