Hi! I have 2 questions regarding this simple problem:
If I use my Texax Instruments BAII Plus calculator to enter the following: (under ordinary annuity mode)
FV: 200,000 (actually the result is the same without entering the FV)
When computing PV, I get the result as 2,122,420.715. The textbook calculation for this step is 2,067,119.05. I understand the formula used in the textbook but I wonder why using the calculator yields a different result?
My second question is：a different approach will be viewing this as an annuity due (payment starting today of $200000 for the next 20 years), so under the mode of “BGN” of the calculator, if we enter the following:
Then when computing PV, I get the result of 2,318,802.849. But the textbook’s result is 2,267,119.05. I’m totally lost!
Anyone can arrive at the same result as me? Any answer will be greatly appreciated!