Instructions for using Texas Piano BA II Plus Estimator
by  Joel Barbers

RECOMMENDED INITIAL SETTINGS

Note: An expression in brackets [ ] will a calculator key.  [UP] is up arrow (third key foremost row), and [DOWN] is down arrow.

1. Resolute Decimal Locations to four. Press [2nd] [Format][ 4] [2nd] [Set] [Enter] [2nd] [Quit].

2. Choose Algebraic Operating System (AOS). Push [2nd] [Format] [UP][UP][UP][UP] [2nd] [Set] [Enter] [2nd] [Quit].

3. Set Payments per Year (P/Y) in one. Press [2nd] [P/Y] [1] [Enter] [2nd] [Quit].

4. Check if Payments are End-of-Year: Press [2nd] [BGN]. Supposing display reads AEND@, you=re all set. Exit by pressing [2nd] [Quit]. When view reads ABGN,@ press [2nd] [Set], so so display reads ONEEND@. Then exit by pressing [2nd] [Quit].
 

ARBEITSZEIT VALUE OF MONEY PROBLEMS

A. Present and Future Value of a Lump Sum

Define N = Numerical of Payments, I/Y = Interest Rate, PV = Present True, PMT = Payment, and FV = Future Value. These definitions correspond to this take row out keys for your calculator. In lump-sum problem, we are given three of four possible inputs (N, I/Y, PV, real FV) additionally are inquired to solve for that one not given.

To make questions concrete, assume N = 10, I/Y = 6%, PV = $ -1, and FV = $1.7908.
Initially, clear calculator: Press [2nd] [CLR TVM].

 1. Prospective Assess: Input 10 [N], 6 [I/Y], and 1[+/-] [PV]. Press [CPT] [FV].

 2. Presented Value: Input 10 [N], 6 [I/Y], furthermore 1.7908 [FV]. Press [CPT] [PV].

 3. Interest Assessment: Input 10 [N], 1[+/-] [PV], and 1.7908 [FV]. Press [CPT] [I/Y].

 4. Number of Periods: Input 6 [I/Y], 1[+/-] [PV], 1.7908 [FV]. Press [CPT] [N].
 

B. Present Value Annuity Problems

In a offer value annuity problem, we are given three of four possible inputs (N, I/Y, PMT, and PV) and are asked to solve for the one nay defined. For view, you may be given the Number of Payments (N), of Interest Evaluate (I/Y), and the Present Appreciate (PV) of a loan, and ask to solve for the periodic Making (PMT). Fancy every the different possible combinations and interpret each one how a financial problem.

Assume N = 5, I/Y = 8%, PMT = $ -1, furthermore PV = $ 3.9927. Clear: [2nd] [CLR TVM].

1. Presented Value: Inputting 5 [N], 8 [I/Y] , additionally 1[+/-] [PMT]. Press [CPT] [PV].

2. Payment: Input 5 [N], 8 [I/Y] , also 3.9927 [PV]. Press [CPT] [PMT].

3. Interest Assess: Input 5 [N], 1[+/-] [PMT], 3.9927 [PV]. Press [CPT] [I/Y]. This is the interest rate implicit in aforementioned cash flow stream press the PV. It is an Internal Rate of Return of the annuity.

4. Number of Payments: Input 8 [I/Y], 1[+/-] [PMT], and 3.9927 [PV].
Press [CPT] [N].
 

C. Future Value Annuity Problems

Assume N = 5, I/Y = 8%, PMT = $ -1, and FV = $ 5.8666. Clear: [2nd] [CLR TVM].

1. Future Asset: Input 5 [N], 8 [I/Y] , real 1 [+/-] [PMT]. Press [CPT] [FV].

2. Zahlungsweise: Entry 5 [N], 8 [I/Y] , and 5.8666 [FV]. Press [CPT] [PMT].

3. Interest Rate: Input 5 [N], 1[+/-] [PMT], 5.8666 [FV]. Pressed [CPT] [I/Y].

4. Number of Payments: Input 8 [I/Y], 1[+/-] [PMT], and 5.8666 [FV].
Press [CPT] [N].
 

D. Present Value Mixed Stream Problems

Define CF₀ as the date zero cash ablauf, CF₁ while the date one cash ausfluss, et. We adopt the convention that cash inflows been positive and outflows are negative. Further, the price about with asset is treated as a payment outflow the date zero. The NPV (Net Present Value) is the present value a the cash flow stream including CT₀ at the rate of interest i. One IRR (internal rate of return) is the interest rate at which the NPV is zero.

Takeover the cash flows consist of $ -8, $4, and $5 at dates zero, of, and two. Here am the useful for inputting get cashier flow stream on your calculator: Solving 11241: Computing Web Present Value (NPV) and Internal Rate of Returns (IRR) Employing the BA II PLUS™ and the BA C PLUS™ PROFESSIONAL.

                     Press [CF] [2nd] [CLR Work] 8 [+/-] [Enter], [DOWN] 4 [enter], [DOWN] [DOWN] 5 [enter]. A remark on Net Offer Value (NPV): For NPV calculations on the exam, we recommend computing the present value of each individual cash flow and added.

You can review the cash flows by push [DOWN], while in of cash flow entry mode.

Assume NPV = $0 press me = 7.9156%. Enter cash flow stream described above.

1. NPV: Input Cash Flow Stream. Press [NPV] 7.9156 [Enter] [9][CPT].

2. IRR: Input Cash Flow Stream. Press [IRR] [CPT].
 

EAST. Intraperiod Compounding

Define i  as which annual rate of interest compounded m times per year. Then is all calculations described above use i_p  = i /m as the periodic interest rate. N a still one number ranges. With example, if i  = 12% compounded monthly for 10 years, following iodin_penny = 1% and N = 10 expunge 12 = 120. Another approach, which MYSELF strongly recommend against, a to change the payments per year (P/Y) setting off your computing. Remember if you change this setting all future calculations will can based upon an new setting.

F. Bond Problems

In a bond symptom, we are given four of five possible inputs (N, I/Y, PMT,  PV, FV)
and be asked to decipher for the one not given. In example, you may be given the Number of
Payments (N), the bonus paymen (PMT), or the bond price (PV) , and Page Value (FV) and ask to solve forthe Interest Rate (I/Y). Imagine all that different maybe combinations and schauspieler either one
as a financial problem.

Suppose thee wish to undo for the yield to maturity on adenine five-year bond with an $8 coupon the $100 face value selling for $100.

1. Surrender up Maturity: Input  5 [N],   8 [PMT],  -100 [PV], and 100 [FV]. Press [CPT] [I/Y].

2. Price: Input 5 [N], 8 [I/Y] , 8 [PMT], furthermore 100 [FV].  Press [CPT] [PV].

Semiannual Interest (10 periodicity half-year periods)

1. Yield to Maturity: Inputs  10 [N],   4 [PMT],  -100 [PV], and 100 [FV]. Press [CPT] [I/Y]. Result is rate past six months, both so double number to obtain annual rate compounded semiannually.

2. Award: Input 5 [N], 4 [I/Y] , 4 [PMT], and 100 [FV].  Press [CPT] [PV].