Welcome to the ordinary annuity

calculations tutorial utilizing the BA II Plus calculator. I'' m. Joshua Emmanuel Ordinary annuity merely implies set repayments are made at the end of the settlement interval. Like at the end.

of the month, or at the end of the year or at the end of the quarter. Let'' s look at. a few instances Example 1: Discover the future value of 4 hundred buck payments made.

at the end of on a monthly basis for 5 years if rate of interest is 3.2 percent worsened.

monthly. In this instance settlements are made at the end of monthly as well as passion.

is also worsened monthly settlement period as well as compounding.

regularity synchronize so we describe that as easy annuity. We start by pressing 2ND P/Y. P/Y generally represents settlements per year. Considering that settlements are made each month there would be 12 repayments per year.

so we enter 12 ENTER, scroll down It is likewise an intensified monthly so we enter 12 ENTER and after that we can give up that mode.Next we enter the moment worth of money values and after that. calculate future value.

So for N we have 5. years and settlements are made at the end of. on a monthly basis so total number of payments will certainly be 5 times 12 which is sixty payments in overall so we push N rates of interest is 3.2; we push 3.2 I/Y and also existing value we don ' t have present value we just have. month end payments so we '

ll do absolutely no present value, and also for the. payments we enter them as 400 make them

negative since cash ' s. heading out and after that press PMT as well as we compute.

future value.So the future worth is 25,989.15$ 25,989.15.

Let ' s look at. one more instance. Example 2 What is today value of repayments of. 250 bucks made at the end of every quarter for. twelve factor 5 years at 7.5 percent worsened semiannually so in this case we see that settlements are. made quarterly however rates of interest is compounded.

semi-annually Settlement period and compounding.

regularities are various so we call this basic annuity. So once more to begin we require to. set our P/Y. 2ND P/Y so payments are made at the end of every. quarter. Quarterly payment require that we established P/Y to 4 so

press 4 ENTER, we scroll down and also this is worsened semiannually. which means two times a year so we established C/Y to 2 ENTER and after that we stopped that mode.

2ND. QUIT Next we go into N. In this situation we have quarterly payments made for 12 and also half. years so we have 12 point 5 times 4 To ensure that is 50 settlements entirely now we press N rate of interest is 7.5. percent 7.5 I/Y. We want to calculate the here and now value. so we don ' t have that.We avoid that in the meantime settlement is 250 so we get in that as 250

unfavorable settlement Given that there ' s no future value, we established future value to'zero 0 future worth, and then we calculate existing value so the existing value $8,096.11 Many thanks for watching.

I'' m. Joshua Emmanuel Ordinary annuity simply indicates established settlements are made at the end of the settlement period. Given that repayments are made every month there would be 12 settlements per year.

Example 2 What is the present value of payments of. 2ND P/Y so repayments are made at the end of every. Quarterly repayment call for that we established P/Y to 4 so

press 4 ENTER, we scroll down and this is compounded intensified.