I should definitely know this by now but… if you’re using the Time value calculations on your calculator to compute say for example - the number of years it will take to reach your investment objective of having $6,000,000 when you retire and you’re saving $60,000 a year. Why would you have to put a negative sign in for the PMT function? It doesn’t make sense to me.

In contrast, if you weren’t saving $60,000 a year and instead your salary wasn’t enough to cover your living expenses and you were in fact losing $60,000 a year after deducting living expenses from your salary - why would you have a + sign for that??

I should really know this but what is the thinking that I’m missing?

Best way to remember, any money being deposited is a negative number and any money being withdrawn is a positive number.

The reason it works that way is because the FV is assumed to be a distribution. Since that is postive number, the PMT for a distribution has to be positive too.

Funny though, I went through level 1 and 2 always putting PMT as a positive number… Only until level 3 dealing with required returns did I realize if PMT and PV are not set up correctly, the calculation may end up being wrong.

The TVM buttons on the calculator are cash flow buttons; cash inflows are positive and cash outflows are negative.

You have two viewpoints from which to choose, and they’re equally valid: the investor or the account. I always tell my Level I candidates to decide, right now, which viewpoint they’re going to adopt, then always use that viewpoint.

If you choose the investor’s viewpoint, then:

PV is negative, as you’re giving money to the account

PMT is negative for deposits and positive for withdrawals

FV is positive, as you’re receiving money from the account

If you choose the account’s viewpoint, then:

PV is positive, as you’re receiving money from the investor

PMT is positive for deposits and negative for withdrawals

FV is negative, as you’re giving money to the investor

It turns out that you’re completely wrong and DK is correct: in fact, not only do you need to write down the inputs, but, as he correctly demonstrated, you need to specify the model of calculator that you use.