How do you guys manage to keep track of the right signs to use for PMT, FV and PV on your calculators? I have got frustrated with i keep ending up with the Error 5 problem without actually no what I have done wrongly.
your FV and PMT values should always be the same (pick +), and PV the opposite (-). Doing that will never give u an error.
I just enter PV as a negative amount each time. PMT & FV as positives. Havenât gotten the dreaded âError 5â in agesâŚ
will stick to this, thanks guys.
is that full proof?
Never gives the wrong answer?
If i take pv negative, fv and pmt positive, I get a different answer! if i take pv and pmt positive, i get a different answer! And the answer of situation 2 was correct.
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A client has $202,971.39 in an account that earns 8% per year, compounded monthly. The clientâs 35th birthday was yesterday and she will retire when the account value is $1 million. At what age can she retire if she puts $250 per month into the account every month, beginning in one month from today?
This is the question. According to a basic hack, I should FV and PMT of same sign and FV and PV of opposite signs! But that doesnt work here!
If i take pv negative, fv and pmt positive, I get a different answer!
If i take pv and pmt positive, i get a different answer!
And the answer of situation 2 was correct.
2 cents?
Thanks
Not necessarily.
Theyâre cash flow buttons: + for inflows, â for outflows.
You can take the viewpoint of the investor or the account. If you choose the investorâs viewpoint:
- PV is negative: the investor puts money into the account
- PMT is negative if the investor deposits into the account and positive if the investor withdraws from the account
- FV is positive: the investor withdraws the final amount from the account
If you choose the viewpoint of the account, all of those signs are reversed.
I encourage you to choose a viewpoint and stick with it.