TVM and Financial Calculator
General Calculator settings:
Changing # of decimal places: [Gold] [DISP] [# of desired #s diplayed after decmial point]
Example: Enter 0.123456789 [+] 0 [=]
To show 2 digits after decmial point: [GOLD] [DISP] 2 0.12
4 digits after decimal point: [GOLD] [DISP] 4 0.1235
(notice that the calculator rounds the last digit shown in the display)
Set # of payments per year to 1: [1] [GOLD] [P/YR]
You want P/YR set to 1 for all problems. I do not teach use of the calculator with alternate settings, as I find this to be confusing to students. You may use those settings if you choose to, but must learn them from the owner's manual. (There is one example of using these functions in red below.)
If your calculator is showing a comma where there should be a decimal point: [GOLD] [./,]
To switch from end mode (for ordinary annuity calculations) to begin mode (for annuities due):
[GOLD] [BEG/END] You want to be in END mode for most calculations. If you use begin mode, you MUST change back to end mode after finishing your calculations in begin mode.
Time Value of Money calculations:
FV of a Lump Sum: FV = PV(1+r)n
FV of $300, 5 yrs, 10% FV = 300 (1+.10)5
= 300 * 1.61051
= 483.153
Using the Calculator: [Gold] [Clear All] (Clears all of the registers in the calculator)
1 [Gold] [P/Yr] (Sets # payments per period to 1)
300 [+/-] [PV] (Enters -300 as the PV)
5 [N] (Enters 5 as the number of compounding periods)
10 [I/YR] (Enters 10% and the interest rate)
Hit [FV] = 483.15 (Calculates the Future Value of $300 at 10% for 5 years)
Try FV of $1000, 8 Yrs, 6% Answer = 1,593.85
Solving for Interest Rate: What rate of return is required to double an amount in 10 years?
Try 100 [+/-] [PV] (enters -100 as the present value)
200 [FV] (enters 200 as the future value, double the $100 PV amount)
10 [N] (enters 10 as the number of compounding periods)
[I] = 7.1773% (Consistent with Rule of 72: TDM = 72/10=7.2)
Solving for Number of Periods: How long will it take for
Changing # of decimal places: [Gold] [DISP] [# of desired #s diplayed after decmial point]
Example: Enter 0.123456789 [+] 0 [=]
To show 2 digits after decmial point: [GOLD] [DISP] 2 0.12
4 digits after decimal point: [GOLD] [DISP] 4 0.1235
(notice that the calculator rounds the last digit shown in the display)
Set # of payments per year to 1: [1] [GOLD] [P/YR]
You want P/YR set to 1 for all problems. I do not teach use of the calculator with alternate settings, as I find this to be confusing to students. You may use those settings if you choose to, but must learn them from the owner's manual. (There is one example of using these functions in red below.)
If your calculator is showing a comma where there should be a decimal point: [GOLD] [./,]
To switch from end mode (for ordinary annuity calculations) to begin mode (for annuities due):
[GOLD] [BEG/END] You want to be in END mode for most calculations. If you use begin mode, you MUST change back to end mode after finishing your calculations in begin mode.
Time Value of Money calculations:
FV of a Lump Sum: FV = PV(1+r)n
FV of $300, 5 yrs, 10% FV = 300 (1+.10)5
= 300 * 1.61051
= 483.153
Using the Calculator: [Gold] [Clear All] (Clears all of the registers in the calculator)
1 [Gold] [P/Yr] (Sets # payments per period to 1)
300 [+/-] [PV] (Enters -300 as the PV)
5 [N] (Enters 5 as the number of compounding periods)
10 [I/YR] (Enters 10% and the interest rate)
Hit [FV] = 483.15 (Calculates the Future Value of $300 at 10% for 5 years)
Try FV of $1000, 8 Yrs, 6% Answer = 1,593.85
Solving for Interest Rate: What rate of return is required to double an amount in 10 years?
Try 100 [+/-] [PV] (enters -100 as the present value)
200 [FV] (enters 200 as the future value, double the $100 PV amount)
10 [N] (enters 10 as the number of compounding periods)
[I] = 7.1773% (Consistent with Rule of 72: TDM = 72/10=7.2)
Solving for Number of Periods: How long will it take for