3. $200,000 down payment now; $25,000 per year for 3 years beginning at the end

Question

3. $200,000 down payment now; $25,000 per year for 3 years beginning at the end of the current year; $75,000 per year for 11 years beginning at the end of the fourth year after the purchase.




This is the answe >$200,000 + $25,000(2.40183) + $75,000(5.93770)(0.71178) = $577,020.96
I want to know how I can get in the calculator? Step by step.


3. $200,000 down payment now; $25,000 per year for 3 years beginning at the end of the current year; $75,000 per year for 11 years beginning at the end of the fourth year after the purchase.




This is the answe >$200,000 + $25,000(2.40183) + $75,000(5.93770)(0.71178) = $577,020.96
I want to know how I can get in the calculator? Step by step.


3. $200,000 down payment now; $25,000 per year for 3 years beginning at the end of the current year; $75,000 per year for 11 years beginning at the end of the fourth year after the purchase.




This is the answe >$200,000 + $25,000(2.40183) + $75,000(5.93770)(0.71178) = $577,020.96
I want to know how I can get in the calculator? Step by step.







This is the answe >$200,000 + $25,000(2.40183) + $75,000(5.93770)(0.71178) = $577,020.96
I want to know how I can get in the calculator? Step by step.

Explanation / Answer

The Result will be your answer.

The answer is based on 12% interest rate To Arrive at the solution using calculator, please follow the below mentioned steps: - For this We will have to use memory function in the calculator Step 1 - As our calculations are based on using 12% (0,12) interest rate. Add 1+0.12 = 1.12 Step 2 - To Calculate Present Value factor for 3 years, divide 1 by 1.12 and add to memory by pressing M+ Step 3 - Now press equal to immediately after pressing M+, so that our division 1/1.12 will again be divided by 1.12. Press M+ again. Step 4 - Now again press equal to immediately after pressing M+, so that our division is further divided by 1.12. Press M+ again. The idea here is to do this as many times as the number of years. Here the number of years is 3 Step 5 - Now press Memory recall MRC button, that should be 2.40183 Now Multiply this by 25,000 Step 6 - Calculate Present value factor for 11 years for interest rate 12%. Step 7 - For this follow Step 2, 3 and 4 except here you will repeat this 11 times just as we did 3 times earlier. Then follow step 5. You should get 5.9377 As the 11 years start from 4th year we nee to multiply it by 3 year present value factor to compensate for this. Step 8 - Divide 1 by 1.12 and press equal to 3 times to get the 3 year present value factor which will be 0.711780246 Now Multiply $ 75,000 by the result obtained from step 7 and step 8. You have $200,000 already given to you in the question. Step 9 - Add $ 200,000 with the multiplication result after step 5 and step 8.

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