llustration 10-1 Compound Interest Formulas Formula If periodic payment is made at the beginning of each period When to use Need to know FV; know PV FV = PV(1 + i) IA Not applicable. PV Need to know...

Extracted text: llustration 10-1 Compound Interest Formulas Formula If periodic payment is made at the beginning of each period When to use Need to know FV; know PV FV = PV(1 + i) IA Not applicable. PV Need to know FV; know PMT Multiply the result by (1 + i). (1 + i) - FV = PMT IB PMT PMT PMT PMT РМТ РМТ РМТ РМТ Need to know PV; know FV PV =FV 2A Not applicable. (1 + i) FV Multiply the result by (1 + i). PMT PMT PMT PMT Need to know PV; know PMT PMT PMT PMT PMT 2B PV = PMT (1 + i)" ? Need to know interest rate; know PV and FV FV - 1 i = ? Not applicable. i = FV PV Divide the result by (1 + i). Need to know PMT; know FV FV(i) 4A PMT = FV (1 + i)" - 1 FV Divide the result by (1 + i). Need to know PMT; know PV PV(i) 4B PMT PV 1- (1 + i)" PV Need to know n; know at least two of these variables: PV, FV, PMT PV + (1 + i) (PMT) - In (PMI) (1 + i) (PMT) - FV PV + - In PMT -FV 5* n= ? n = In(1 + i) n = In(1 + i) esent value; FV = future value: PMT = periodic payment; i = interest rate per period, expressed in decimal form; n = total number of periods. The ymbol In stands for natural logarithm. Dona S is a comprehensive formula that covers quite a few situations. For this formula, use proper sign convention for PV, FV, and PMT. Think of the PV


Extracted text: Charles wants to retire in 18 years. At that time he wants to be able to withdraw $22,000 at the end of each year for 18 years. Assume that money can be deposited at 6% per year compounded annually. What exact amount will Charles need to deposit today to have enough to cover his retirement? Show the use of the appropriate formula by indicating the use of the information into the formula.