Education Technology

# Knowledge Base

## Solution 30212: Calculating the Present Value in Annuities on a BA II Plus Professional and BA II Plus.

### How do I calculate the Present Value in Annuities on a BA II Plus Professional and BA II Plus?

To calculate the Present Value in Annuities on a BA II Plus and BA II Plus Professional please follow the example below:

Example: The Furros Company purchased equipment providing an annual savings of $20,000 over 10 years. Assuming an annual discount rate of 10%, what is the present value of the savings using an ordinary annuity and an annuity due? 1) Set all variables to defaults by pressing [2nd] [+/-] [ENTER] 2) Set P/Y to 1 by pressing [2nd] [I/Y] [1] [ENTER] [CE|C] [CE|C] 3) Enter number of payments by pressing [1] [0] [N] 4) Enter interest rate per payment period by pressing [1] [0] [I/Y] 5) Enter payment by pressing [2] [0] [0] [0] [0] [+/-] [PMT] 6) Press [CPT] [PV] to calculate the present value of the savings which is$122,891.34 with an ordinary annuity
7) Press [2nd] [PMT] [2nd] [ENTER] to change the calculation mode to beginning-of-period payments.
8) Press [2nd] [CPT] then [CPT] [PV] to calculate the present value of the saving which is \$135,180.48 with an annuity due.