 # 2008 AM Q1 PartD ii

why can’t it be?

N=5 PV=-10,200,000 PMT= -55,000 FV = 15,000,000 ?

Both ways are presented

Using the HP12-C calculator, the following figures are used in the calculation when

solving for

i:

N = 5, PV = 10,200,000, PMT = -55,000, FV = -15,000,000, compute i = 8.48%

or

N = 5, PV = -10,200,000, PMT = 55,000, FV = 15,000,000, compute i = 8.48%

Note: Salaries/expenses are a wash.

I think he misplaced the negative signs. Put all the outflows and inflows on different operative and you should be fine.

@ cpk123, let me ask did you even read my question before you RESPONDED?

How do we infer these signs?

if there is a outflow, PMT=> negative

may be, I think, one good way will be to think if one is issuing a bond

so PV = +ve (initial inflow of principal )

PMT = -ve (outflow of coupons)

FV = -ve (final outflow of principal)

how are you guys tackling these signs ?

Can you email me this paper

jeffreynewton68@yahoo.co.uk

make sure your PMT and FV signs are the same and PV is opposite

thanks igor. could you explain why is that? am i missing something ?

i think you assume PV is inflow and PMT and FV are outflows and vice verse