PV, FV, N, PMT, and I/Y in time value of money. An example to compute one of the components (PV, FV, I/Y, PMT, or N) in your example. Show how to use your financial calculator to solve the problem you come up with. A real-life example is preferred.

AN EXAMPLE FROM A PROFESSOR

Example:Buying a 2021 BMW 330i

I find my dream car: 2021 New MBW 330i with the sales price of $45,945. The dealer provides a 72-month financing offer of 3.9% APR. What would my monthly payment be if I were to purchase my dream car using 100% financing? With TI BA II Plus, PV=45,945, N=72, I/Y=3.9/12, FV=0 => PMT?

45945 PV

72 N

3.9 / 12 = I/Y

0 FV

CPT PMT = -716.73

My monthly car payment would be $716.73 for 6 years (72 months).

That's a lot of money every month... Maybe I should consider a pre-own option. By the way, the EAR = (1+3.9%/12) ^12 - 1 = 3.97%