5: Time Value of Money 61
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
BEG
N
P/YR
ICNV
PV
END
CFLO
PMT
BOND
FV
DEPRC
OTHER
AMRT
SOLVE CURRX
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