5: Time Value of Money 61
File name : English-M02-1-040308(Print).doc Print data : 2004/3/9
5
Time Value of Money
The phrase time value of money describes calculations based on money
earning interest over a period of time. The TVM menu performs
compound-interest calculations and calculates (and prints) amortization
schedules.
In compound interest calculations, interest is added to the principal at
specified compounding periods, thereby also earning interest.
Savings accounts, mortgages, and leases are compound-interest
calculations.
In simple interest calculations, the interest is a percent of the principal
and is repaid in one lump sum. Simple interest calculations can be
done using the
%
key (page 40). For an example that calculates
simple interest using an annual interest rate, see page 190.
The TVM Menu
FIN BUS SUM TIME
TVM
I%YR
BE
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