Note: if you cannot remember how to model reducing balance relations with regular repayments, revise notes for 5.1 Modelling Annuity Investments.
Guide to Analysing Annuity Investments using Technology (Casio Graphics Calculator)
Note: if you cannot remember how to use the Casio Financial Calculator, revise notes for 3.3 Modelling Reducing Balance Systems with Regular Repayments using Technology.
- The annual interest rate should be entered/calculated as a positive value.
- The initial value (PV) should be entered/calculated as a negative value (remember we justify this by saying we must lose this amount to create the investment).
- The payment (PMT) (i.e. the amount withdrawn) should be entered/calculated as negative (we can justify this by saying we lose this amount per compounding period to the investment)