TOPIC: Future Value Question

Your friend Joe is planning to retire 20 years from today. He is investing $200,000 in a longterm investment
at 3.5%. How much will this money be worth in 20 years?
FV= PV*(1 +r) ^n
$397,597 = $200,000 * (1+0.035) ^ 20
How do you calculate the 20th power/ exponent?

Hi Kristin,

If I remember correctly, the online Windows calculator they provide also has the capabilities for scientific functions. If my thinking is correct, you can find the value of exponents on the Windows Calculator by going to Scientific Mode. Simply open up the calculator in desktop mode, then go to View, and click on Scientific. Once in Scientific mode, you'll see a different layout than the Standard mode. Look for the button that says x^y.

Hope this helps.

Kristin,

I decided to record a short video and show you. Here you go:



Click here if you cannot see the video above

Hi Cornelius,
The short vid was extremely helpful. I was trying to figure out how to calculate "to the power" w/out a calculator.
Thank you Rahul as well as you explained the answer to my understanding.
Kristin

Can anyone confirm that the Prometric computer calculator has scientific functions?

Bonnie, That's a great question! Can anyone confirm prometric calculators will provide a scientific calculation mode?

Hello,

I don't really think so. I am wondering why you need a scientific calculator? You will be given a small and physical calculator as well. Please go with the assumption that only the simple calculator will be available.

Best regards

Based on previous discussion responses, the only way to calculate an exponent/ to the power for FV or PV is in scientific mode
on a calculator.
Can you advise how to do this in standard mode on a calculator.

Thank you.

Kristin,

If you really want to be sure what will actually be available for the test you should plan to visit the Prometric test center and ask them what is available. They should be able to show you the online calculator that will be used. Also, if you want a hand held calculator as well you need to specifically ask them to give you one. They will not freely offer it to you unless you ask.

Mark

Kristin,

Worst case scenario is that you can just take the resultant in the parentheses and multiply it by itself 20 times, in the case of your example. 1.035 to the 20th power is just 1.035 multiplied by itself 20 times. Not pretty but it would work. Not saying that it will not happen to you but I did not get any of these types of questions on my exam. Of course, you should plan for the possibility. I just wouldn't get too concerned about it. The majority of the questions are situational. I only had 6 or 7 questions on my entire exam requiring any calculation. Maybe I was just lucky.

Good luck to you.

Mark

Mark, your a genius! It worked! $397,957.
I understand it was a difficult formula, but you never know!
And I don't want to rule anything out.
Thank you for your help
Kristin

Kristin,

You are so kind. I am certainly no genius but I am very happy I was able to help. All the best to you in your exam studying and preparations. Be confident that you will pass!

Mark