Formula needed??? creating, beginning, individual, interest

hinsafdar

An individual is creating a charitable trust to provide six annual payments of $20,000 each,
beginning today. How much money must the individual set aside now at 10 percent interest
compounded annually to meet the required disbursements?

thisisbrianly

FV =0; N=5; PMT=-20,000; I/Y=10%

CPT "PV". PV = 75,815.74. Now add 20,000 to it because the first 20,000 is made today and not at the end of the year. Therefore PV = 75,815.74 + 20,000 = $95,815.74

This is the amount of money he needs to set aside to meet his 6 annual payments of 20k starting today.



Edited 1 time(s). Last edit at Friday, November 26, 2010 at 08:47AM by Hey_I_am_the_Dude_man.

JRossSter

I dont know if the formula is needed I know it can be done in the Calc.... remember to put it in Beg Value

rkapoor

no formula needed you can do it on a financial calc or in Excel in 5 sec
but TVM is a concept everybody who wants to do finance should know imo; and I also think anyone in finance does know this...