Plus42 Equations, Preview Release

[TeamTricky]

(05-08-2022 08:06 AM)Thomas Okken Wrote:  

(05-07-2022 10:40 PM)TeamTricky Wrote:  I have a question regarding TVM. Perhaps I am simply using this incorrectly. Please try this:

1. Open TVM menu
2. Key in 12 for N
3. Key in 0 for I%YR
4. Key in -10000 for PV
5. Key in 1000 for PMT
6. Press FV.

I expect to see 2000, but instead I see -2000. It seems (to me) like the sign is not handled properly once the balance changes sign.

That is the correct result.

The sign indicates which way the payment is going. Let's say negative means money you pay, while positive means money you receive. (You could do it the other way around. Either choice is fine, as long as it's applied consistently.)

So in this case, you start by paying 10,000, so it looks like you're lending money to someone else. Next, you receive 12 payments of 1,000 each. So now you've actually been repaid more than you lent out, so you end up owing, and the future value, which is the final payment, is -2000, because you have to pay what you've been overpaid.

(05-07-2022 10:40 PM)TeamTricky Wrote:  If I try the same thing in the AMRT table, I see what I expect.

That's because the AMRT table shows the balance, which is the opposite of the future value. That is, it represents the unpaid part of the loan, while FV represents the final payment. Thus, BAL represents a payment to the borrower, while FV represents a payment to the lender, so the quantities have the same magnitude but opposite signs.

Thank you for that explanation.

I was (incorrectly) equating FV with BAL. When I check FV after 9 payments, it is 1000, which is the opposite of BAL. And after 12 payments, FV is -2000, again, the opposite of BAL.