nick_sun wrote:
I am trying to solve the tasks on the time value of money (designed for 12c) but can't find the right keys on the calculator. Does anybody know how to solve it on 12c, general or platinum?
The problem and its suggested solution are attached.
That seems to be the right solution. The thing to understand about simple interest is that it isn't compounded - so its just 5000 * .06 * 10 = $3000 in interest. There is no way to solve for that directly on the 12c as far as i know - its just basic math. Principal * rate * period = amount accrued. I dont believe that the 12c has a "simple interest" function, although it might.
Whereas - for the annual compounding - the $5000 PLUS the interest gains interest every year.
N = 10
I = 6%
PV = 5000
PMT = 0
FV = ?
means FV = $8,954
Two ways to compare it now:
Either (A) compare the totals or (B) compare the interest
(A) Compare $8,954 to your simple interest - $5000 plus $3000 in interest = $8000. So you get $954 in difference.
(B) Alternatively, compare just the interest parts -- $8,954 minus your original $5000 investment means you made $3,954 in interest with annual compounding .As compared to the $3,000 you made under simple interest - you made $954 more. Either way you get to $954.
Not sure that there's any faster way of solving it on a 12c other than manually figuring out the simple interest and then comparing that using n=, pv=, etc.
By the way, why in the world are you doing these problems?