Education Technology

Future Value of an Ordinary Annuity & Sinking Funds

Activity Overview

In this activity, students carry out financial computations, involving annuity, and the future value of annuities. Students also deal with computations involving sinking funds.

Before the Activity

  • Select TVM Solver from the calculator menu
  • See the attached activity PDF file for detailed instructions for this activity
  • Print page 17-19 from the attached PDF file for your class
  • During the Activity

    Distribute the pages to the class.

    Follow the Activity procedures:

  • Calculate the future value of an annuity using N, I%, PV, PMT, P/Y, and C/Y values
  • Calculate the monthly payments to be made to generate a specified future yield using N, I%, PV, FV, P/Y, and C/Y values
  • Calculate the future value of deposits made quarterly using N, I% (compounded quarterly), PV, PMT, P/Y, and C/Y values
  • Calculate the amount accumulated in a sinking fund that earns interest compounded monthly
  • Calculate the monthly payments to be made into a sinking fund to accumulate a specific value in a certain period of time
  • After the Activity

    Review student results:

  • As a class, discuss questions that appeared to be more challenging
  • Re-teach concepts as necessary