# Financial Calculator Exercises Essay

Texas BA II Calculator Workshop

CHARTERED FINANCIAL ANALYST

Setting up your BAII

Calculator Workshop

Setting up your calculator (BAII Plus) Decimal places &|F! Set to mathematical precedence &|"&! No. of payments per year &-K Clear time value calculations &0

Calculator Workshop

Memory function The calculator can store numbers for you Example: You calculate the answer to 2 + 3.5 = 5.5 and then wish to store it Press D then K (5.5 has now been stored and assigned to button K Having cleared the screen (P), it is now possible to recall the number by pressing J then K

It is always possible to recall the last answer from the calculator by pressing & and then x

CHARTERED

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NB : Signs

N

I/Y

PV

PMT

FV

Calculator Workshop

Example: If $5,000 grows to $5,798.47 over three years, what is the six-monthly interest rate? BEFORE YOU START CLEAR THE CALCULATOR & ^ > % > > > > , . / 0

Calculator Workshop

Future values of ordinary annuities For example, 3-year $5,000 annuity at 5%:

> > > > % >

, . / 0 15,762.50

Calculator workshop

Present value of ordinary annuities For example, 3-year $5,000 annuity at 5%:

> > % > > >

, . 13,616.24 / 0

Calculator workshop

Example: Ordinary annuities: calculating an unknown variable 10yr $10,000 annuity, interest rates 5%. What is FV?

12yr annuity with a future value of $180,000 Interest rates are 5.5%. What are the annual payments?

How many payments of $4,342.65 to get a future value of $60,000 at 7%?

What interest rate would result in a future value of $50,445.05 over seven years with annual payments of $5,000?

Calculator Workshop

SERIES OF EVEN CASH FLOWS Future Value/(Present Value) of an Annuity An annuity is something which pays regular cash flows at fixed periods, over a given period of time: Ordinary Annuity The cash flows are made at the end of each period:

+200 +200 +200 +200 +200 +200

T0

T1

T2

T3