Student Question (TVM)

QUESTION:

for the excerise on pg 326 of the book. Finding AO60 = 94,379.29

ok first I do, f fin to clear it out

then 7.25 g I to put in monthly interest

300 n for the periodic payment schedule

681.19 PMT

then I hit PV

and get $94,242.3258


ANSWER:

James,

The difference is caused by the round of the PMT. The actual payment is 682.1763. With 300 payments, the rounding can make a significant difference. jah