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Vicinno 12C Financial Calculator
www.vicinno.com
TVM Example
Suppose you want to ensure that you can finance your daughter’s college education. You expect that the cost will be about $12,000 a year ($1000 a month) for 4 years. Assume she will withdraw $1000 at the beginning of each month from a savings account. How much would you have to deposit into the account when she enters college if the account pays 6% annual interest compounded monthly?
In this particular example:
n is 4 years × 12 periods per year = 48 periods.
i is 6% per year ÷ 12 periods per year = 0.5% per period.
PV is the quantity to be calculated — the present value when the financial transaction begins.
PMT is $1000.
FV is zero, since by the time your daughter graduates she (hopefully!) will not need any more money.
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