Future Value of Cash Flows

C

CFA Candidate

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Apr 14, 2009
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I am using the American / Canadian CFA level one book as a guide. I Vol. I they have the present and future value of a cash flow. Now using a HPBII calculator have this calculation: $1,000 for 5 years at 5% NPV = $4,329.48. Now I understand the discounting in the Future value it is $5,525.64 - which I can do by hand but how do you do this on the calculator? Also then calculate a cash flow out of $1000 - how is that done ? Thank you.
 
4,329.48 and $5,525.64 are both correct.

Please state your question clearly...
are you looking for a formula, or for which keys to hit on your calculator?
 
CFA Candidate said:
I am using the American / Canadian CFA level one book as a guide. I Vol. I they have the present and future value of a cash flow. Now using a HPBII calculator have this calculation: $1,000 for 5 years at 5% NPV = $4,329.48. Now I understand the discounting in the Future value it is $5,525.64 - which I can do by hand but how do you do this on the calculator? Also then calculate a cash flow out of $1000 - how is that done ? Thank you.
Click to expand...

Since you can do this by hand - how come you don't know the formula?

Button pushing can be self-taught from user's manual.
 
I did this on my HP12C

[f][CLEAR FIN]
[g][end]
5[n]
5
1000[CHS][PMT]
0[FV]
PV

And it said 4,329.476671

If I then do this:

0[PV]
FV

It says 5,525.631250

Perhaps the HPBII works about the same since this calculation does not require RPN.

You really should read your manual and work ALL the example problems. Get familiar with your tools! They cannot help you if you don't know how to use them.
 
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