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28 — Q
UALIFIER
P
LUS
®
III
X
Simple Interest vs. Compound Interest
If you borrow $5,000 at 6% simple interest, how much will you owe
at the end of 5 years?
*This is a simple math problem and does not require the use of TVM keys.
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Multiply loan amount
by interest 5 ) x 6 % = 300.00
Multiply by term x 5 = 1,500.00
Add original loan amount + 5 ) = 6,500.00
If the loan is compounded monthly, what will you owe?
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter loan amount 5 ) l 5,000.00
Enter term 5 T 5.00
Enter interest 6 ˆ 6.00
Find future value s l “run” 6,744.25
Future Value
Given any four components to a problem that includes a future
value, you can calculate the fifth.
Appreciation
You purchased a home for $350,000 and want to know its value in 3
years, figuring an inflation or appreciation rate of 6%.
(Set periods to
one per year.)
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Set to 1 payment/year 1 s ÷ 1.00
Enter present value* 3 5 0 ) l 350,000.00
Enter term in years 3 T 3.00
Enter appreciation rate 6 ˆ 6.00
Find future value** s l “run” 416,855.60
Return to 12 payments/year
1 2 s ÷ 12.00
* Present Value (PV) = original purchase price; enter as
l
** Future Value (FV) =
s l
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