Calculating Present Value in Today’s Dollars

What is the present value of $100 in today’s dollars in three years, if you assume inflation at a 3.5% rate and that the annual average after-tax rate investment is 9% (assuming a yearly compound rate)? There are two ways of computing the answer. Read More

Calculating Amortization of a Loan

Assume you purchase a car for $20,000 at an 8% interest rate over a five-year period. What is the monthly payment? I use the following grid to visualize the keystrokes on the HP-12C. As you see, the items are the same from left to right on your calculator. Enter the following to get a monthly payment of $405.52. Read More

Pell Grant: Expected Family Contribution

The awarding of a Pell Grant is based on the cost of attending a college, the expected family contribution amount, and whether student attendance is based on a full academic year as a part-time or full-time student. Read More

Serial Payments

Serial payment is really a term of art. It is a payment that increases each period to keep up with inflation. Assume the following information: Read More