VIDEO ABOUT TIME VALUE MONEY

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What is Future Value, Net Present Value & Annuity

CALCULATE ANNUITY USING EXCEL

i. Click the function button (fx), select Financial and double-click PMT.

Figure 7 shows the dialogue box

 ii. A dialog box appears and asks what data to use.

Figure 8 shows the formula box

iii. After fill the box with the data, the answer will show up.

Figure 9 shows the data filled in the box and the result of the formula

CALCULATE NET PRESENT VALUE USING EXCEL

i. Firstly, you have to insert the data in the column.

Figure 4 shows the data that have been insert in the column

 ii. Next, enter the formula "=NPV(B3,B3,B6)+B4" to account for that initial outlay.

Figure 5 shows formula that have benn type in the column

iii. Click enter, then the answer will come out.

Figure 6 shows the answer of the data

CALCULATE FUTURE VALUE USING EXCEL

i. Click the function button (fx), select Financial and double-click FV.

Figure 1 shows the dialog box

ii. A dialog box appears and asks what data to use.

Figure 2 shows the formula box

 iii. After fill the box with the data, the answer will show up.

Figure 3 shows the data filled in the blog and the result of the formula

CALCULATION ANNUITY USING FORMULA

PMT=FV(r)(1+r)n-

For example an individual who would like to calculate the amount they would need to save per

year to have the balance of RM5,000 after 5 years. Assumed that the effective rate per year 

would be 3%.

PMT=RM 5000(0.03)(1+0.03)5-1

PMT=RM 1500.1593

PMT=RM 941.77

BENEFITS USING ANNUITY

      Tax deferral

Annuities was the only investment that is inherently accorded tax-deferred status. Furthermore, 

annuities have no limit on the amount of money that can be placed into them and also no income 

phase out schedules advantage over Individual Retirement Account (IRAs) and qualified plans for 

wealthy investors who can shelter millions of money taxation inside these contracts. 

Guaranteed Payout

Usually annuitants that choose any type of life payout option can rest assured that they will receive

some sort of payments until they die, even if the completely exhaust the value of the contract

beforehand.

Protection from probate and creditors

Generally annuity contract are exempt from creditors in most cases and are unconditionally exempt from

probate proceedings nationwide. Sometimes exemption from creditors can vary somewhat from 

one state to another.

WHAT IS ANNUITY?

Annuity definition

 -          a fixed sum of money paid to someone each year, typically for the rest of their life.
-          a form of insurance or investment entitling the investor to a series of annual sums.