Financial Calculator Exercises Essay

2403 Words Dec 12th, 2014 10 Pages
CHARTERED FINANCIAL ANALYST

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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/ 0

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

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