In this lesson, we'll look at two examples
of determining future value when an account pays
compounded interest using the TI-84 TVM Solver.
In this first example, you deposit $2000 in an account
earning 6% interest compounded annually.
How much will you have in the account in 15 years?
To access the TVM Solver, we press the apps button here.
We want the first option, finance, so we press enter.
We also want this first option, TVM Solver
so we press enter again.
And now we'll enter all the values that we know
and we'll come back to the future value,
the value we're trying to find.
N represents the total number of compounds
over the total time period and because the interest
is compounded annually, or one time per year for 15 years,
N is 15, so 15 enter.
The interest rate is a percentage, is 6%.
So we enter six, not point zero six,
the percent is a decimal.
The present value in the account is $2000,
the amount you had to pay, so the present value
is going to be negative 2000.
And the amount we have to pay is going to be negative.
There's no regular payments, so the payment will stay zero.
We're trying to find the future value, so we'll skip
this for now.
And because we have interest compounded annually,
we want the payments per year and compounds per year
both to be one and we'll leave this last option
for payment as end.
Now we go back up to the future value here,
and press alpha enter so we can solve for the future value.
So we press alpha enter.
Notice how the calculator puts a square here in the far left
indicating this is a value we solve for.
The future value to the nearest cent will be $4,793.12.
So the account balance after 15 years is $4,793.12.
Let's look at our second example.
Here you deposit $2500 in an account that pays
5.5% annual interest compounded monthly.
How much will there by in the account after one year,
two years and five years?
So first determine the amount after one year.
So we'll go back up to N, the total number of compounds.
Because it's compounded monthly for one year,
N would be one times 12, or 12 for this first answer.
So 12 enter.
The annual interest rate is 5.5%, so we enter 5.5 enter.
The initial deposit is $2500, so the present value
is negative 2500, again because we had to pay this amount.
There are no additional payments,
so the payment stays at zero.
We'll come back to future value that we're trying to find.
But now, here because we have interest compounded monthly,
we'll set payments per year and compounds per year to 12.
Now if we enter 12 for payments per year and press enter,
it automatically changes the compounds per year.
And we'll leave this last row on end.
Now we'll go back up to future value
and to solve for this we press alpha enter.
So after one year, the account balance is $2641.02.
Let's go ahead and write this down.
And now we'll find the account balance after two years.
To do this, we simply change N.
And again, because we have interest compounded monthly,
now for two years, N would be two times 12, or 24.
So we'll change N to 24.
Press enter.
Everything else remains the same,
and so we go back down to future value
and press alpha enter.
And now the new account balance for the two years
is going to be $2789.99 to the nearest cent.
And then finally, we'll find the account balance
after five years.
So we just have to change N again.
Again, because we have interest compounded monthly,
for a total of five years, N is going to be
five times 12, or 60,
we can just enter five times 12,
press enter and it will calculate that value for us.
We'll go back down to future value
and press alpha enter to determine the account balance
after five years, which is $3289.26.
This is how we use the TVM Solver on the TI-84
when we're trying to determine future value
of an account that pays compound interest.
I hope you found this helpful.