| Variable | Meaning in annuity questions |
|---|---|
| N | total number of payment periods |
| PMT | regular payment or deposit |
| PV | starting amount / loan amount |
| FV | ending balance or future value |
| I% | interest rate |
Choose the unknown: Read the question carefully: are you solving for the final value, the payment, or the number of periods?
Setup example
A saver deposits $200 each month for 5 years. Which TVM entries are immediate?
Step by step
- Monthly means N = 5 × 12 = 60.
- PMT = 200, and the period frequency settings should match monthly.
Final answer
N = 60, PMT = 200, monthly settings.
Match the period frequency: Monthly payments mean monthly periods. This must match the calculator settings.
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Repayment setup example
A $12 000 loan is repaid monthly over 4 years. What is N?
Step by step
- Monthly over 4 years gives 4 × 12 periods.
Final answer
N = 48
Periods, not years: Do not type N = 4 if the payments are monthly. N must count payment periods.
Interpret the answer: If the calculator gives a non-integer number of periods for a 'full months' question, you may need to round up.
Interpretation example
A calculator gives N = 26.4 months. How many full monthly payments are needed?
Step by step
- 26.4 months means 26 full payments are not enough.
- So you need the next whole payment count.
Final answer
27 full monthly payments