Question

Sam opened a retirement fund with $25,000. The fund pays 4.8% interest compounded monthly, and he expects to retire in 40 years. He also does not plan to make any payments into the account. He used the TVM Solver to help him predict how much his retirement fund would be worth in 40 years (see below). What did Sam do incorrectly? What can he do to fix his mistake?

N = 40
I% = 4.8
PV = -25000
FV = ?
P/Y = 12
C/Y = 12

Answer 1

There is a negative sign in front of the 25000 for PV

PV is present value, which s a deposit of 25,000, so this should be a positive number and not a negative one.