Did you know that Amazon is offering 6 months of Amazon Prime - free two-day shipping, free movies, and other benefits - to students? Furthermore, assume that you have determined that you will need $100,000 at that time in order to pay for tuition, room and board, party supplies, etc. This is the classic type of problem that we can quickly approximate using the Rule of 72. When we entered the interest rate, we input 10 rather than 0.10. Note that in our original problem we assumed that you would earn 8% per year, and found that you would need to invest about $25,000 to achieve your goal. In this case, though, we assumed that you started with only $20,000. For example, suppose that we wanted to find out the future value if we left the money invested for 10 years instead of 5. Click here to learn more. Of course, most people don't recognize a wrong answer when they get one, so they blithely forge ahead. We'll begin with a very simple problem that will provide you with most of the skills to perform financial math on the BAII Plus Professional: Suppose that you have $100 to invest for a period of 5 years at an interest rate of 10% per year. The calculator’s 110-page manual covers all of its functions in detail, and it is You may have to use the arrow keys to scroll through the list of options until you see DEC = 2 (or whatever the current number is). In addition to the previously mentioned financial keys, the BAII Plus Professional also has the CF (cash flow) key to handle a series of uneven cash flows. Therefore, in order to reach the same goal, you would need to earn a higher interest rate. Type 18 into N, and then press CPT I/Y to find that you need to earn an average of 9.35% per year. BA II Plus Tutorial 1 Payments per year: The calculator is initially set at twelve payments per year (it assumes monthly compounding). Now to find the future value simply press CPT (compute) and then the FV key. Sample Problem: A bond pays 6% coupon payments, semi-annually. Are you a student? Let's try a new problem: Suppose that you are planning to send your daughter to college in 18 years. That is because, if both numbers are positive, the calculator thinks that you are getting a benefit without making any investment. Again, if you get Error 5 instead of an answer, it is because you didn't follow the cash flow sign convention. endstream endobj 98 0 obj <> endobj 99 0 obj <> endobj 100 0 obj <>stream Otherwise, you may find that numbers left over from previous problems will interfere with the solution to this one. I'll start off with a discussion on which BA II Plus calculator I prefer (and why), moving on to the recommended calculator settings for CFA exams, then jumping into details of each function I found useful, before ending with the usual FAQ section. That is a lot of money to invest all at once, but we'll see on the next page that you can lessen the pain by investing smaller amounts each year. Unlike other financial calculators, the BAII Plus Professional comes from the factory set to assume annual compounding (others default to monthly compounding which is less than optimal). 0 Before we jump straight in, a quick overview: These tips and advice apply to both BA II Plus & BA II Plus Professional calculator models. If you don't, you will quickly learn that if you enter wrong numbers you will get wrong answers. Press 2nd FV (CLR TVM) to clear the memory. Learn how to do advanced calulator functions using the BAII Plus calculator for the CFA ® exam from Kaplan Schweser’s Dr. Doug Van Eaton, CFA. This is not enough. If you get this error, just press CE\C to clear it and then fix the problem by changing the sign of either PV or FV. Now press CPT PV and you will see that you need to invest $25,024.90 today in order to meet your goal. One adjustment is important. h�b```f``2b`a`�a`@ �+sL��vpq5r.e�ź�#�m*�. "g̢[�~; u��:$4�u[�x���T~���d�0�9�F��l�:�H�F�-�� l�� ��\�(̰��'�L(�~�U�b�`�\{�@BK����;���G�}+��u��6��a��. If you have $20,000 to invest today, what compound average annual rate of return do you need to earn in order to reach your goal? Enter 9 into I/Y, -1250 into PV, and 2500 into FV. When you have solved a problem, always be sure to give the answer a second look and be sure that it seems likely to be correct. ��n�9�>�La`$���X� � �� Well, the compounding assumption is hidden from view and in my experience people tend to forget to set it to the correct assumption. All rights reserved, understand the calculations that the calculator is doing, Every time value of money problem has either 4 or 5 variables (corresponding to the 5 basic financial keys). Now all we need to do is enter the numbers into the appropriate keys: 5 into N, 10 into I/Y, -100 into PV. Keep that in mind because it can help you to spot incorrect answers due to a wrong input. ن�U^�ή�� 0 ��R� If you don't make either the PV or FV a negative number (and the other one positive), then you will get Error 5 on the screen instead of the answer. Maybe you have recently sold an investment and would like to know what your compound average annual rate of return was. Texas Instruments BAII Plus Tutorial for Use with Fundamentals 11/e and Concise 5/e This tutorial was developed for use with Brigham and Houston’s Fundamentals of Financial Management, 11/e and Concise, 5/e, especially Chapter 2, the Time Value of Money. Let's return to our college savings problem from above, but we'll change it slightly. However, we can easily find the exact answer using the BAII Plus calculator. Simply enter 10 into. 97 0 obj <> endobj As before, we need to be careful when entering the PV and FV into the calculator. That's exactly what I have been wanting for years. In this step-by-step tutorial, we walk you through how to obtain the Modified Duration value using a Texas Instrument BA II Plus financial calculator. Now press CPT N and you will see that it will take 8.04 years for your money to double. Solving for the interest rate is quite common. The TI BAII Plus Professional is a fairly easy to use financial calculator that will serve you well in all finance courses. H�\S�n�0��s4Rc��{X�����&���M���;c���3��|�ߒ�����P�&�ݖ�MB�m �-��� zg�4���F[H��(���Œy�U\�.z -�t���P��[�=���ߒM~��6���k�j���F73�\���ts��iV&��gC�cU���p{T�� =�A�22;�c�3HA0\���U�6��3�&Xp��H!����A$E�U���QC3ʙ�/ى��ZP�646h��2Jq'e�����{������G�n���I\'�9D�cZ�! In this case, you are going to invest $20,000 today (a cash outflow) and receive $100,000 in 18 years (a cash inflow). I. t has 10 years left to maturity and the current market rate is 6.84%. }.s�Ol��9����]\L�ʳ�'00H�z'7���m^)W O��5u\�('�7H�|�a��5����l�h`r�:��FG3��r;��Xa�� ӆ�@����"^@�3�0�2y2�00Y1>f|���e=O����/'��,#�H8X30]=�������N��9 ,KKJ Furthermore, assume that you have determined that you will need $100,000 at that time in order to pay for tuition, room and board, party supplies, etc. Enter the data as follows: 18 into N, 8 into I/Y, and 100,000 into FV. Why? Unlike other financial calculators, the BAII Plus Professional comes from the factory set to assume annual compounding (others default to monthly compounding which is less than optimal). endstream endobj 102 0 obj <>stream If it isn't there, please drop me a note and I'll try to answer the question. Note that we enter the $100,000 as a positive number because you will be withdrawing that amount in 18 years (it will be a cash inflow). h�Ԗmo�0ǿ�_n���ĎT!-m��C Z'!^d�A���$պo��� �-�7�|�پ3��s��!�(���Q�A�#Fu �}� Personally, I like to see five decimal places, but you may prefer some other number. %%EOF The order in which the numbers are entered does not matter. Once you set the number of decimal places, press Enter to lock in your choice. Posted By: Kaplan Schweser Updated: August 18, 2020. To change the display, press 2nd ., and, when prompted, enter the number of digits you would like to see displayed. 111 0 obj <>/Filter/FlateDecode/ID[<05777E79B7AEEFCA358C33A58AD95672><7647E19EC5A29D46ADB852AD68A1AB55>]/Index[97 27]/Info 96 0 R/Length 75/Prev 140355/Root 98 0 R/Size 124/Type/XRef/W[1 2 1]>>stream

.

White Anemone Season, Yugioh Duel Links Reinforcement Of The Army, Egg Sandwich Ideas For Lunch, Kirkland Brown Rice And Quinoa Recipes, Shadow In Cantonese, Courtship Behaviour In Birds, Sketching Pencils For Beginners,