PV Function

[BSAT Student]

I have this problem to solve. I used the PV function in Excel, but the number
just doesn't seem right. When I calculate the same info on my TI-83 Plus, it
comes up with a completely different number. The problem is: "Show the
present value of 15 annual payments made to you, each payment being for
$2000. Assume that the interest rate is 7.5% per year and that the first
payment is made 12 months from today." When I calculate using the PV
function, the answer is $266.67. But when I calculate on the TI-83 Plus, I
get $17,654.24. What is it that I'm doing wrong? Which is correct? I have to
show the formula used in my spreadsheet. Any help would be greatly
appreciated.

 

[Ron Rosenfeld]

I have this problem to solve. I used the PV function in Excel, but the number
just doesn't seem right. When I calculate the same info on my TI-83 Plus, it
comes up with a completely different number. The problem is: "Show the
present value of 15 annual payments made to you, each payment being for
$2000. Assume that the interest rate is 7.5% per year and that the first
payment is made 12 months from today." When I calculate using the PV
function, the answer is $266.67. But when I calculate on the TI-83 Plus, I
get $17,654.24. What is it that I'm doing wrong? Which is correct? I have to
show the formula used in my spreadsheet. Any help would be greatly
appreciated.

For someone to help you, it would be useful to post the formula that you are
using.

Using the PV function, and the values you post, I get $17,654.24
, which is the same as your TI-83+.

So you are probably not entering the values correctly into the Excel function
you are using.
--ron

 

[bpeltzer]

Looks like you left of the % on the interest rate; the rate is 7.5%, not 7.5.

 

[Mike Middleton]

BSAT Student -

Generally, if you want to know what you are doing wrong, it's best to
describe what you are doing.

When I enter =PV(0.075,15,2000) into a cell, the result is -17654.23949.

The negative result is explained in Excel's Help for "PV worksheet
function."

- Mike
http://www.mikemiddleton.com

 

[BSAT Student]

Thanks guys. I figured it out just before I got the notification that you had
responded. I did leave off the % sign. I just didn't think it was needed when
I entered the number into the "Rate" field. Thanks so much for the help!

 

[JMB]

This gave me $17,654.24

=PV(7.5%,15,2000)