Accessing Prompted-Worksheet Variables
After you access a worksheet, press # or " to select variables. For example, press & \ to access the Amortization worksheet, and then press # or " to select the amortization variables (P1, P2, BAL, PRN, INT).(See TVM and Amortization Worksheet Variables on page 22.) Indicators prompt you to select settings, enter values, or compute results. For example, the i# $ indicators remind you to press # or " to select other variables. (See Reading the Display on page 2.) To return to the standard-calculator mode, press & U.
Types of Worksheet Variables
Enter-only Compute-only Automatic-compute Enter-or-compute Settings
Note: The = sign displayed between the variable label and value indicates that the variable is assigned the value.

Enter-Only Variables

Values for enter-only variables must be entered, cannot be computed, and are often limited to a specified range, for example, P/Y and C/Y. The value for an enter-only variable can be: Entered directly from the keyboard. The result of a math calculation. Recalled from memory. Obtained from another worksheet using the last answer feature.
When you access an enter-only variable, the calculator displays the variable label and ENTER indicator. The ENTER indicator reminds you to press ! after keying in a value to assign the value to the variable. After you press !, the indicator confirms that the value is assigned.

Compute-Only Variables

You cannot enter values manually for compute-only variables, for example, net present value (NPV). To compute a value, display a compute-only variable and press %. The calculator computes and displays the value based on the values of other variables.
When you display a compute-only variable, the COMPUTE indicator reminds you to press % to compute its value. After you press %, the indicator confirms that the displayed value has been computed.
Automatic-Compute Variables
When you press # or " to display an automatic-compute variable (for example, the Amortization worksheet INT variable), the calculator computes and displays the value automatically without you having to press %.

Entering Cash Inflows and Outflows
The calculator treats cash received (inflows) as a positive value and cash invested (outflows) as a negative value. You must enter cash inflows as positive values and cash outflows as negative values. The calculator displays computed inflows as positive values and computed outflows as negative values.
Generating an Amortization Schedule
The Amortization worksheet uses TVM values to compute an amortization schedule either manually or automatically.
Generating an Amortization Schedule Manually
1. 2. 3. 4. 5. Press & \. The current P1 value appears. To specify the first in a range of payments, key in a value for P1 and press !. Press #. The current P2 value appears. To specify the last payment in the range, key in a value for P2 and press !. Press # to display each of the automatically computed values:
BAL the remaining balance after payment P2 PRN the principal INT the interest paid over the specified range
Press & \. or If INT is displayed, press # to display P1 again. To generate the amortization schedule, repeat steps 2 through 5 for each range of payments.
Generating an Amortization Schedule Automatically
After entering the initial values for P1 and P2, you can compute an amortization schedule automatically. 1. Press & \. or If INT is displayed, press # to display the current P1 value. Press %. Both P1 and P2 update automatically to represent the next range of payments. The calculator computes the next range of payments using the same number of periods used with the previous range of payments. For example, if the previous range was 1 through 12 (12 payments), pressing % updates the range to 13 through 24 (12 payments). 3. Press # to display P2. If you press % with P1 displayed, a new value for P2 will be displayed automatically. (You can still enter a new value for P2.) If you did not press % with P1 displayed, you can press % with P2 displayed to enter values for both P1 and P2 in the next range of payments.
Press # to display each of the automatically computed values for
BAL, PRN, and INT in the next range of payments.
Repeat steps 1 through 4 until the schedule is complete.
Example: Computing Basic Loan Interest
If you make a monthly payment of $425.84 on a 30-year mortgage for $75,000, what is the interest rate on your mortgage? To Set payments per year to 12. Press & [ 12 !

12.00 0.00 N= 360.00

Return to standard-calculator & U mode. Enter number of payments 30 & Z , using the payment multiplier.
To Enter loan amount. Enter payment amount. Compute interest rate.
75000. 425.84 S / PV= PMT= I/Y=

75,000.00 -425.84 5.50

Answer: The interest rate is 5.5% per year.
Examples: Computing Basic Loan Payments
These examples show you how to compute basic loan payments on a $75,000 mortgage at 5.5% for 30 years. Note: After you complete the first example, you should not have to reenter the values for loan amount and interest rate. The calculator saves the values you enter for later use.

This example shows you how to use the TVM and Amortization worksheets to calculate the monthly payments on a 30-year loan and generate an amortization schedule for the first three years of the loan.
Computing Mortgage Payments
Calculate the monthly payment with a loan amount of $120,000 and 6.125% APR. To Set all variables to defaults. Set payments per year to 12. Press &}! & [ 12 !
0.00 12.00 0.00 N= I/Y= PV= PMT= 360.00 6.13 120,000.00 -729.13*
30 & Z , 6.125 120000.
Answer: The computed monthly payment, or outflow, is $729.13.
Generate an amortization schedule for the first three years of the loan. If the first payment is in April, the first year has nine payment periods. (Following years have 12 payment periods each.) To Select the Amortization worksheet. Set beginning period to 1. Set ending period to 9. Display 1st year amortization data. Press &\
1! P1= P1= P2= BAL= PRN= INT=
9.00 118,928.63* -1071.37* -5,490.80* 10.00 21.00

#9 ! # # #

Change beginning period to 10. Change ending period to 21.

# 10 ! P1= # 21 ! P2=

To Display 2nd year amortization data.

Press # # # #% # # # #

BAL= PRN= INT= P1= P2= BAL= PRN= INT=

117,421.60*

_-1,507.03*
-7,242.53* 22.00 33.00 115,819.62* -1601.98* -7,147.58*
Move to P1 and press % to enter next range of payments. Display P2. Display 3rd year amortization data.
Example: Computing Payment, Interest, and Loan Balance After a Specified Payment
A group of sellers considers financing the sale price of a property for $82,000 at 7% annual interest, amortized over a 30-year term with a balloon payment due after five years. They want to know: Amount of the monthly payment Amount of interest they will receive Remaining balance at the end of the term (balloon payment)
Computing the Monthly Payment
To Set all variables to defaults. Set payments per year to 12. Return to standard-calculator mode. Enter number of payments using payment multiplier. Enter interest rate. Enter loan amount. Compute payment. Press &}! & [ 12 ! &U
30 & Z , 782000. N= I/Y= PV= PMT= RST P/Y=

Display 0.00

360.00 7.00 82,000.00 -545.55
Generating an Amortization Schedule for Interest and Balloon Payment

To Press

P1= P2= BAL= INT=

Display 1.00

60.00 77,187.72 -27,920.72
Select Amortization worksheet. & \ Enter end period (five years). View balance due after five years (balloon payment). View interest paid after five years. # 5 &Z ! # ##
If the sellers financed the sale, they would receive: Monthly payment: $545.55 for five years Interest: $27,790.72 over the five years Balloon payment: $77,187.72

All cash-flow problems start with an initial cash flow labeled CFo. CFo is always a known, entered value.

Grouped Cash Flows

Cash-flow problems can contain cash flows with unique values as well as consecutive cash flows of equal value. Although you must enter unequal cash flows separately, you can enter groups of consecutive, equal cash flows simultaneously using the Fnn variable.
Cash flows consist of an initial cash flow (CFo) and up to 24 additional cash flows (C01-C24), each of which can have a unique value. You must enter the number of occurrences (up to 9,999), or frequency (F), for each additional cash flow (C01-C24). 1. 2. 3. 4. 5. 6. 7. 8. 9. The calculator displays positive values for inflows (cash received) and negative values for outflows (cash paid out). To clear the Cash Flow worksheet, press & z. Press '. The initial cash-flow value (CFo) appears. Key in a value for CFo and press !. To select an additional cash-flow variable, press #. The C01 value appears. To change C01, key in a value and press !. To select the cash-flow frequency variable (F01), press #. The F01 value appears. To change F01, key in a value and press !. To select an additional cash-flow variable, press #. The C02 value appears. Repeat steps 4 through 7 for all remaining cash flows and frequencies. To review entries, press # or ".

To enter cash flows:

Deleting Cash Flows
When you delete a cash flow, the calculator decreases the number of subsequent cash flows automatically.
The DEL indicator confirms that you can delete a cash flow. 1. 2. Press # or " until the cash flow you want to delete appears. Press & W. The cash flow you specified and its frequency is deleted.

Inserting Cash Flows

When you insert a cash flow, the calculator increases the number of the following cash flows, up to the maximum of 24.
Note: The INS indicator confirms that you can insert a cash flow. 1. 2. 3. Press # or " to select the cash flow where you want to insert the new one. For example, to insert a new second cash flow, select C02. Press & X. Key in the new cash flow and press !. The new cash flow is entered at C02.

Computing Cash Flows

The calculator solves for these cash-flow values: Net present value (NPV) is the total present value of all cash flows, including inflows (cash received) and outflows (cash paid out). A positive NPV value indicates a profitable investment.
Internal rate of return (IRR) is the interest rate at which the net present value of the cash flows is equal to 0.

Computing NPV

1. 2. 3. 4. Press ( to display the current discount rate (I). Key in a value and press !. Press # to display the current net present value (NPV). To compute the net present value for the series of cash flows entered, press %.

Computing Results

To compute results based on the current data set, press # repeatedly after you have selected the statistics calculation method. The calculator computes and displays the results of the statistical calculations (except for X' and Y') automatically when you access them. For one-variable statistics, the calculator computes and displays only the values for n, v, Sx, sX, GX, and GX2.

Computing Y'

1. 2. 3. 4. 5. To select the Statistics worksheet, press & k. Press " or # until X' is displayed. Key in a value for X' and press !. Press # to display the Y' variable. Press % to compute a predicted Y' value.

Computing X'

1. 2. 3. 4. 5. To select the Statistics worksheet, press & k. Press " or # until Y' is displayed. Key in a value for Y' and press !. Press " to display the X' variable. Press % to compute an X' value.

Other Worksheets

The calculator also includes these worksheets:
Percent Change/Compound Interest worksheet (& q) Interest Conversion worksheet (& v) Date worksheet (& u) Profit Margin worksheet (& w) Breakeven worksheet (& r) Memory worksheet (& {)
Percent Change/Compound Interest Worksheet
Use the Percent Change/Compound Interest worksheet to solve percent change, compound interest, and cost-sellmarkup problems. To access the Percent Change/Compound Interest worksheet, press & q. To access the Percent Change/Compound Interest variables, press # or ".
Percent Change/Compound Interest Worksheet Variables
Variable Old value/Cost New value/Selling price Percent change/Percent markup Number of periods Key &q # # # Display

OLD NEW %CH #PD

Variable Type Enter/compute Enter/compute Enter/compute Enter/compute
Note: This guidebook categorizes variables by their method of entry. (See Types of Worksheet Variables on page 17.)
Resetting the Percent Change/Compound Interest Worksheet Variables
To reset the Percent Change/Compound Interest variables to default values, press & z while in the Percent Change/Compound Interest worksheet. Variable

OLD NEW

Default 0 0

%CH #PD

Default 0 1
To reset default values for all calculator variables and formats, press & } !.

Entering Values

For percent-change calculations, enter values for any two of the three variables (OLD, NEW, and %CH) and compute a value for the unknown variable (leave #PD=1). A positive percent change represents a percentage increase; a negative percent change represents a percentage decrease. For compound-interest calculations, enter values for the three known variables and compute a value for the unknown fourth variable.
OLD= present value NEW= future value %CH= interest rate per period #PD= number of periods
For cost-sell-markup calculations, enter values for two of the three variables (OLD, NEW, and %CH) and compute a value for the unknown.
OLD = cost NEW= selling price %CH= percent markup #PD= 1

Computing Values

1. 2. To select the Percent Change/Compound Interest worksheet, press & q. The current value for OLD is displayed. To clear the worksheet, press & z.
To enter values for the known variables, press # or " until the variable you want is displayed, then key in a value, and press !. (Do not enter a value for the variable you wish to solve.) Percent Change Enter values for two of these three variables: OLD, NEW, and %CH. Leave #PD set to 1. Compound Interest Enter values for three of these four variables: OLD, NEW, %CH, and #PD. Cost-Sell-Markup Enter values for two of these three variables: OLD, NEW, and %CH. Leave #PD set to 1.
To compute a value for the unknown variable, press # or " until the variable you want is displayed and press %. The calculator displays the value.
Example: Computing Percent Change
First, determine the percentage change from a forecast amount of $658 to an actual amount of $700. Second, determine what the new amount would be if it were 7% below the original forecast. To Select Percent Change/Compound Interest worksheet. Enter original forecast amount. Enter actual amount. Compute percent change. Enter -7 as percent change. Compute new actual amount. Press &q
OLD= OLD= NEW= %CH= %CH= NEW= 0 658.00 700.00 6.38 -7.00 611.94

# 700 ! #%

"%

Answer: $700 represents a 6.38% increase over the original forecast of
$658. A decrease of 7% would result in a new actual amount of $611.94.
Example: Computing Compound Interest
You purchased stock in 1995 for $500. Five years later, you sell the stock for $750. What was the annual growth rate? To Press Display
OLD= OLD= NEW= 0 500.00 750.00 71
Select Percent Change/Compound & q Interest worksheet. Enter stock purchase price. Enter stock selling price.

Other Worksheets 500 !

# 750 !
To Enter number of years. Compute annual growth rate.

Press ## 5 ! "%

#PD= %CH= 5.00 8.45
Answer: The annual growth rate is 8.45%.
Example: Computing Cost-Sell-Markup
The original cost of an item is $100; the selling price is $125. Find the markup. To Select Percent Change/Compound Interest worksheet. Clear worksheet variables. Enter original cost. Enter selling price. Compute percent markup.
Answer: The markup is 25%.

Press &q &z

OLD= OLD= OLD= NEW= %CH= 0 0.00 100.00 125.00 25.00

# 125 ! #%

Interest Conversion Worksheet
The Interest Conversion worksheet converts interest rates between nominal rate (or annual percentage rate) and annual effective rate. To access the Interest Conversion worksheet, press & v. To select interest conversion variables, press # or ".
Variable Nominal rate Annual effective rate

Key &v #

Display NOM EFF C/Y
Variable Type Enter/compute Enter/compute Enter-only
Compounding periods per year #
Note: The calculator categorizes variables by their method of entry. (See Types of Worksheet Variables on page 17.)
Comparing the Nominal Interest Rate of Investments
Comparing the nominal interest rate (annual percentage rate) of investments is misleading when the investments have the same nominal rate but different numbers of compounding periods per year. To make a more valid comparison, convert the nominal interest rate (NOM) to the annual effective interest rate (EFF) for each investment. The nominal interest rate (NOM) is the interest rate per compounding period multiplied by the number of compounding periods per year. The annual effective interest rate (EFF) is the compound annual interest rate that you actually earn for the period of time stated.
To reset all calculator variables and formats to default values, including the Interest Conversion worksheet variables, press & } !. Variable NOM EFF C/Y Default 1

Profit margin #

Note: This guidebook categorizes calculator variables by their method of entry. (See Types of Worksheet Variables on page 17.)
Gross Profit Margin and Markup
The terms margin and markup often are used interchangeably, but each has a distinct meaning. Gross profit margin is the difference between selling price and cost, expressed as a percentage of the selling price. Markup is the difference between selling price and cost, expressed as a percentage of the cost.
Clearing Profit Margin Worksheet Variables
To clear the Profit Margin worksheet variables and reset default values, press & z. All Profit Margin worksheet variables default to zero. To reset default values for all calculator variables and formats, including the Profit Margin worksheet variables, press & } !.

Computing Profit Margin

1. 2. 3. 4. To select the Profit Margin worksheet, press & w. The CST value appears. To enter a value for one of the two known variables, press # or " to select a variable, then key in a value and press !. Repeat step 2 for the second known variable. To compute a value for the unknown variable, press # or " to select the variable and press %. The calculator displays the computed value.
Example: Computing Profit Margin
The selling price of an item is $125. The gross profit margin is 20%. Find the original cost. To Select Profit Margin worksheet. Enter selling price.

Press &w # 125 !

CST= SEL= 0.00 125.00
To Enter profit margin. Compute cost. Answer: The original cost is $100.
Press # 20 ! ""%

MAR= CST= 20.00 100.00

Breakeven Worksheet
The Breakeven worksheet computes the breakeven point and sales level needed to earn a given profit by analyzing relationships between fixed costs, variable costs per unit, quantity, price, and profit. You operate at a loss until you reach the breakeven quantity (that is, total costs = total revenues). To access the Breakeven worksheet, press & r. To access breakeven variables, press " or #. Enter known values for the four known variables, then compute a value for the fifth, unknown variable.
Note: To solve for quantity (Q), enter a value of zero for profit (PFT).
Breakeven Worksheet Variables
Variable Fixed cost Variable cost per unit Unit price Profit Quantity Key Display Variable Type Enter/compute Enter/compute Enter/compute Enter/compute Enter/compute

& r FC # # # #

VC P PFT Q
Resetting the Breakeven Worksheet Variables

100 R RV + -----------------M A 100 R PRI = -------------------------------------- -- -----------------E M DSR ---- Y ---------- 1+ E M
where: PRI =dollar price per $100 par value RV =redemption value of the security per $100 par value (RV = 100 except in those cases where call or put features must be considered) R =annual interest rate (as a decimal; CPN _ 100) M =number of coupon periods per year standard for the particular security involved (set to 1 or 2 in Bond worksheet) DSR =number of days from settlement date to redemption date (maturity date, call date, put date, etc.) E =number of days in coupon period in which the settlement date falls Y =annual yield (as a decimal) on investment with security held to redemption (YLD P 100) A =number of days from beginning of coupon period to settlement date (accrued days) Note: The first term computes present value of the redemption amount, including interest, based on the yield for the invested period. The second term computes the accrued interest agreed to be paid to the seller. Yield (given price) with one coupon period or less to redemption:
RV R R -------- + ---- PRI + A ---- --------- 100 M 100 E M ME -------------------------------------------------------------------------- -------------Y = DSR PRI A R --------- + -- ---- 100 E M
1. Source for bond formulas (except duration): Lynch, John J., Jr., and Jan H. Mayle. Standard Securities Calculation Methods. New York: Securities Industry Association, 1986.
Price (given yield) with more than one coupon period to redemption:
RV -----------------------------------------DSC Y N 1 + ----------E PRI = 1 + ---- + M R A - 100 ---- -M E
R 100 ---M -----------------------------------------Y 1 + ---- M

DSC K 1 + ----------E

where: N =number of coupons payable between settlement date and redemption date (maturity date, call date, put date, etc.). (If this number contains a fraction, raise it to the next whole number; for example, 2.4 = 3) DSC =number of days from settlement date to next coupon date K =summation counter Note: The first term computes present value of the redemption amount, not including interest. The second term computes the present values for all future coupon payments. The third term computes the accrued interest agreed to be paid to the seller. Yield (given price) with more than one coupon period to redemption: Yield is found through an iterative search process using the Price with more than one coupon period to redemption formula. Accrued interest for securities with standard coupons or interest at maturity:

R A - AI = PAR ---- -M E

where: AI =accrued interest PAR =par value (principal amount to be paid at maturity)

Depreciation

RDV = CST N SAL N accumulated depreciation
Values for DEP, RDV, CST, and SAL are rounded to the number of decimals you choose to be displayed. In the following formulas, FSTYR = (13 N MO1) P 12.
Straight-line depreciation
CST SAL -------------------------LIF First year: -------------------------- FSTYR
Last year or more: DEP = RDV

CST SAL LIF

Sum-of-the-years-digits depreciation
LIF + 2 YR FSTYR ) ( CST SAL ) ----------------------------------------------------------------------------------------------------( ( LIF ( LIF + 1 ) ) 2 ) First year: ----------------------------------------------------------- FSTYR
LIF ( CST SAL ) ( ( LIF ( LIF + 1 ) ) 2 )
Declining-balance depreciation
RBV DB% -----------------------------LIF 100

where: RBV is for YR - 1

First year: ------------------------------ FSTYR Unless ------------------------------ > RDV ; then use RDV Q FSTYR
If DEP > RDV, use DEP = RDV If computing last year, DEP = RDV

CST DB% LIF 100

Statistics
Note: Formulas apply to both x and y. Standard deviation with n weighting (s x):
x 2 ------------------x n ---------------------------------------n
Standard deviation with n-1 weighting (s x):
x x 2 ------------------n ---------------------------------------n1

Mean: x = -------------n

Regressions
Formulas apply to all regression models using transformed data.
n ( xy ) ( y ) ( x ) b = -------------------------------------------------------2 n ( x2 ) ( x ) ( y b x) a = -------------------------------n b x r = ------y
Interest Rate Conversions
EFF = 100 ( e C Y In ( x 1 ) 1 )

where: x =.01 Q NOM P CY

NOM = 100 C Y ( e 1 C Y In ( x + 1 ) 1 )

where: x =.01 Q EFF

Percent Change
%CH NEW = OLD 1 + ------------- 100
where: OLD =old value NEW =new value %CH =percent change #PD =number of periods

Profit Margin

Selling Price Cost Gross Profit Margin = ----------------------------------------------- 100 Selling Price

Breakeven

PFT = P Q N (FC + VC Q)
where: PFT =profit P =price FC =fixed cost VC =variable cost Q =quantity

Days between Dates

With the Date worksheet, you can enter or compute a date within the range January 1, 1950, through December 31, 2049.

All Other Customers

For information about the length and terms of the warranty, refer to your package and/or to the warranty statement enclosed with this product, or contact your local Texas Instruments retailer/distributor.

Symbols

#PD (number of periods) 70, 71, 72 #PD (number of periods, Percent Change/Compound Interest worksheet) 70 %CH (percent change) 70, 71, 72 (- (negative) indicator 3 (#$ indicator 3 (1 (value entered) indicator 3 (GX (sum of X) 63, 65 (GX (sum of X) 63, 65 (GXY (sum of XY products) 63 (GY (sum of Y) 63 (GY (sum of Y) 63 (sx (population standard deviation of X) 63, 65 (sy (population standard deviation of Y) 63 (v (mean of X) 63, 65 (w (mean of X) 63 * (value computed) indicator 3 = (value assigned) indicator 3 Actual/actual day-count method (ACT) 52, 53, 55 Addition 8 AI (accrued interest) 52, 55, 56 Algebraic Operating System (AOS) calculations 4, 5, 96 Amortization formulas 85 schedule 21, 25, 26, 38 worksheet 21 Amount of nth cash flow (Cnn) 41 Angle units format 5 Annual coupon rate, percent (CPN) 52, 54, 55 Annual effective rate (EFF) 73, 74 annual interest rate 54, 73, 87 Annuities 21 due 24, 29, 30 ordinary 24, 29, 30 perpetual 30 ANS (Last Answer) feature 14 AOS (Algebraic Operating System) calculations 5, 96 APD (Automatic Power Down) feature 1, 2 Arccosine 9 Arcsine 9 Arctangent 9 Automatic Power Down (APD) feature 1, 2

Numerics

1/Y (one coupon per year) 52, 53, 55 1-V (one-variable statistics ) 63, 65 2/Y (two coupons per year) 52, 53, 55 2nd (second) functions 2 indicator 3 30/360 day-count method (360) 52, 53, 55, (30/360 day-count method) 52, 53, 55, 75
b (slope) 63 Backspace key 7 BAL (balance) 22, 24 Balance (BAL) 22, 24 Battery 97 precautions 97 replacing 97 Beginning-of-period (BGN) indicator 3 payments 22, 24 BGN (beginning-of-period) indicator 3
a (y-intercept) 63 Accrued interest (AI) 52, 55, 56 Accuracy 95 ACT (actual/actual day-count method) 52, 53, 55, 75 Actual/actual (ACT) day-count method 75
payments 22, 24 Bond accrued interest (AI) 52 price (PRI) 56 terminology 54 worksheet 5156 Breakeven worksheet 7879
Cost (CST) 57, 60, 77 Cost-Sell-Markup 71, 72 Coupon payment 54 CPN (annual coupon rate, percent) 52, 53, 54, 55 CST (cost) 57, 60, 77 Curve fitting 65 customer support and service 99
C/Y (compounding periods per year) 22, 24, 74 Calculation method 4, 5 Call date 54 Cash Flow 41 Cash Flow worksheet 4150 Cash flows computing 44 deleting 42, 43 editing 47 entering 42, 43 formulas 85 grouped 43 inserting 44 uneven 42 CFo (initial cash flow) 41 Chain (Chn) calculation 4, 5, 8 Chn (chain) calculation 4, 5, 8 Clearing calculations 6 calculator 6 characters 6 entry errors 6 error messages 6 errors 6 memory 6, 12 worksheets 6 Cnn (amount of nth cash flow) 41 Combinations 8, 10 Compound interest 54, 69, 71, 73 Compounding periods per year (C/Y) 22, 24, 74 COMPUTE indicator 3 Constant Memory feature 2 Constants 13 contact information 99 Correcting entry errors 7 Correlation coefficient (r) 63, 66

Data points 66 Date 1 and 2 (DT1, DT2) 57, 76 Date worksheet 74 Dates 30/360 day-count method (360) 75 actual/actual (ACT) day-count method 75 date 1 and 2 (DT1, DT2) 76 days between dates (DBD) 76 entering 75 Days between dates (DBD) 76 DB (declining balance) 57, 59, 60, 90 DBD (days between dates) 76 DBF (French declining balance) 57, 59, 60 DBX (declining balance with crossover) 57, 59, 60 DEC (decimal format) 4 Decimal format (DEC) 4 Declining balance (DB) 57, 59, 60, 90 Declining balance with crossover (DBX) 57, 59, 60 DEG (degrees) 4, 5 Degree angle units 5 Degrees (DEG) 4, 5 DEL (delete) indicator 3 Delete (DEL) indicator 3 DEP (depreciation) 57, 58, 60 Depreciation (DEP) 57, 58, 60 Depreciation worksheet 5761 Difficulty 98 Discount bond 54 Discount rate (I) 41 Discounted payback (DPB) 41 Display indicators 3 Division 8
Dollar price (PRI) 52, 54, 55 DPB (discounted payback) 41 DT1 (starting date) 60 DT1, DT2 (date 1 and 2) 57, 76 DUR (modified duration) 52
EFF (annual effective rate) 73, 74 END (end-of-period) payments 22, 24 Ending payment (P2) 22, 24 End-of-period (END) payments 22, 24 ENTER indicator 3 Error clearing 94 messages 94 Examples accrued interest 56 amortization schedule 38 amount to borrow 36 annuities 30 balloon payment 40 bond price 56 compound interest 71 computing basic loan payments 27 constants 13 converting interest 74 correcting an entry error 7 cost-sell-markup 72 days between dates 76 down payment 36 editing cash flow data 47 entering cash flow data 47 future value (savings) 28 interest received 40 internal rate of return 48 last answer 14 lease with uneven payments 48 memory 12 Memory worksheet 81 modified duration 56 monthly payments 40 monthly savings deposits 35 mortgage payments 38 net present value 47, 48, 49
other monthly payments 34 percent change 71 perpetual annuities 30 present value (annuities) 29 present value (lease with residual value) 33 present value (savings) 28 present value (variable cash flow) 33 profit margin 77 regular deposits for specific goals 37 remaining balance (balloon payment) 40 residual value 33 saving for future 35 straight-line depreciation 61 EXP (exponential regression) 63, 65 Exponential regression (EXP) 63, 65

r (correlation coefficient) 63, 66 RAD (radians) 5 RAD (radians) indicator 3 Radians (RAD) 5 Radians (RAD) indicator 3 Random numbers 10 RBV (remaining book value) 57, 58, 60 RDT (redemption date) 52, 53, 54, 55 RDV (remaining depreciable value) 57, 58, 60 Reading the display 2 Recalling from memory 12 Redemption date (RDT) 52, 53, 54, 55 Redemption value (RV) 52, 53, 54 Regression models exponential 65 linear 65 logarithmic 65 power 65 Reinvestment rate (RI) 41 Remaining book value (RBV) 57, 58, 60
Starting month (M01) 57, 59, 60 Starting payment (P1) 22, 24 Statistical data 66 Statistics worksheet 6367 Storing to memory 12 Straight line (SL) 57, 59, 60 Subtraction 8 Sum of the years digits (SYD) 57, 59, 60 Sum of X (GX) 63, 65 Sum of X (GX) 63, 65 Sum of XY products (GXY) 63 Sum of Y (GY) 63 Sum of Y (GY) 63 support and service 99 Sx (sample standard deviation of X) 63, 65 Sy (sample standard deviation of Y) 63 SYD (sum of the years digits) 57, 59, 60
Value entered (1) indicator 3 Variable cost per unit (VC) 78, 79 VC (variable cost per unit) 78, 79
warranty 100 What-if calculations 15 Worksheets Amortization 21 Bond 51 Breakeven 78 Cash Flow 41 Date 74 Depreciation 57 display indicators 19 Interest Conversion 72 Memory 80 Percent Change/Compound Interest 69 Profit Margin 76 prompted 18 TVM (Time-Value-of-Money) 15, 16, 18, 21 variables 15, 16, 17, 18
Time-Value-of-Money (TVM) worksheet 15, 16, 18, 21 Time-Value-of-Money and Amortization worksheets ??40 Turning calculator off 1 Turning calculator on 1 TVM (Time-Value-of-Money) worksheet 15, 16, 18, 21 Two coupons per year (2/Y) 52, 53, 55 Two-variable statistics 65, 67
X value (Xnn) 63, 65 X' (predicted X value) 63, 65, 67 Xnn (X value) 63, 65 xP/Y key (multiply payments per year) 25
Y' (predicted Y value) 63, 65 Year to compute (YR) 57, 59, 60 Yield to maturity 54 Yield to redemption (YLD) 52, 55 Y-intercept (a) 63 YLD (yield to redemption) 52, 55 Ynn (frequency of X value) 63, 65 YR (year to compute) 57, 59, 60
Uneven cash flows 42 Unit price (P) 78, 79 Universal power 8
Value assigned (=) indicator 3 Value computed (*) indicator 3

Texas Instruments BAII PLUS Tutorial
To begin, look at the face of the calculator. Almost every key on the BAII PLUS has two functions: each key's primary function is noted on the key itself, while each key's secondary function is noted in white above the key. To use the function on the key, simply press the key. To access the white function above each key, first press the gray key with 2nd printed on it, which we will call the "2nd shift" key, and then press the desired function key. (Note that the 2nd shift key is near the upper left corner of the calculator keyboard.)
Turning the Calculator On and Off To turn on the calculator, press

ON/OFF

. To turn off the calculator, press
Note that the ON/OFF key is on the upper right corner of the keyboard. Also, we will designate keys throughout this tutorial by the use of small boxes, as above. To conserve the battery, the calculator turns itself off about 10 minutes after your last keystroke. Also, note that pressing the 2nd shift key places a little 2nd symbol in the upper left corner of the display. Press the 2nd shift key again and the symbol goes away. The 2nd key is a toggle key that switches back and forth between the regular and the 2nd functions. 2nd is like the typewriter shift key. After you press 2nd , look only at the white writing above the keys. Note that the calculator has a continuous memory, so turning it off does not affect any data stored in the calculator, but it will erase any number showing on the screen.
Clearing the Calculator Five of the most commonly used methods of clearing data are presented below:
2nd 2nd MEM QUIT 2nd 2nd CLR WORK CLR TVM
clears all 10 memory locations and the display. clears the TVM worksheet.

2nd CE/C

CLR WORK
clears worksheets other than the TVM worksheet.
clears the entire display, but not the memory.
clears numbers on the display one at a time if you made a mistake entering data.
Review your owners manual for other methods of clearing information.
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Clearing the calculator is very important, since unwanted data in memory can result in improper calculations, and hence wrong answers. It is best to get into the habit of automatically clearing memory before starting a calculation. Occasionally, you may purposely want to save data, but, in general, you will be entering all new data, so starting with a clear memory is the safest approach.
Changing the Display To change decimals from 2 to 4, press displayed. To change from 4 places to 2, press
2nd 2nd FORMAT 4 ENTER 2nd QUIT

. 0.0000 is

FORMAT

. 0.00 is displayed.

We usually set the display to 2 places, which is especially convenient when working with dollars and percentages. However, we often use 4 places when dealing with interest rates and rates of return that are entered as decimals.
Periods per Year Setting One important setting that can cause problems is the periods per year setting. To check the current setting, P/Y press 2nd. The display shows the setting for periods/year. The calculator comes pre-set at 12 periods per year, that is, it assumes calculations will be done on a monthly basis. However, finance textbook problems generally use 1 period/year. To change to 1/year: Press

2nd P/Y

P/Y 2nd Now the calculator is set to assume 1 period/year. To confirm this setting, press 2nd QUIT. Unless needed for other work, we generally leave the calculator setting at 1 period per year.
Time Value of Money (TVM) The TVM keys are located on the third row from the top of the keyboard.

N I/Y PV PMT FV

In general, TVM problems involve four variablesthree are known and the fourth is unknown.
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Lump Sums To begin, we consider TVM calculations with single (lump) sums. In this situation, we do not use the PMT key, so be sure to either press 2nd CLR TVM , which sets the payment (PMT) equal to 0, or enter 0 as the PMT when entering the input data. If you know any three variables, you can find the value of the fourth. Example 1: What is the FV of $100 after 3 years if the interest rate is 26 percent? First, clear with Next, enter the data. 100 0

N I/Y PV PMT 2nd CLR TVM

(Optional if registers are cleared.)

CPT FV

To determine the FV simply press
and the FV of -$200.04 is displayed.
The BAII PLUS is programmed so that if the PV is + then the FV is displayed as - and vice versa, because the BAII PLUS assumes that one is an inflow and the other is an outflow. When entering both PV and FV, one must be entered as negative and the other as positive. Example 2: What is the PV of $500 due in 5 years if the interest rate is 10 percent? Clear first and then enter the following data. Pressing the

CPT N I/Y PMT

key reveals that $310.46 will grow to $500 in 5 years at a 10 percent rate.
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Example 3: Assume a bond can be purchased today for $200. It will return $1,000 after 14 years. The bond pays no interest during its life. What rate of return would you earn if you bought the bond? Simply press the

N +/PMT FV PV +/-

key changes the sign.)
key and the BAII PLUS calculates the rate of return to be 12.18%.
Remember that the BAII PLUS is programmed so that if the PV is + then the FV is displayed as - and vice versa because the BAII PLUS assumes that one is an inflow and the other is an outflow. Now suppose you learn that the bond will actually cost $300. What rate of return will you earn?
I/Y Override the -200 by entering 300 +/- PV , then press CPT to get 8.98 percent. If you pay more for the bond, you earn less on it. The important thing, though, is that you can do what if analyses with the calculator.
Now do nothing except press ON/OFF to turn off the calculator. Then turn on the calculator ON/OFF. The display shows 0.00. Is the memory erased? Not completely. What was on the screen is gone, but press RCL N to get N = 14.
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Ordinary Annuities Example 1: What is the FV of an annuity of $100 paid at the end of each year for 5 years if the interest rate equals 6 percent? 6% /))))))))3))))))))3))))))))3))))))))3))))))))1 -100 -100 -100 -100 -100 Now press the Example 2: What is the PV of the same annuity? Leave data in calculator, but enter 0 as the FV to override, then press Annuities Due Each payment of an annuity due occurs at the beginning of the period instead of at the end as with a regular annuity. In essence, each payment is shifted back one period. To analyze annuities due press 2nd BGN 2nd SET CE/C. BGN appears on the screen and in the upper right corner of the display. Now the BAII PLUS analyzes the cash flows based on beginning of period payments. Change back to end BGN 2nd SET CE/C mode by pressing 2nd.

CPT PV N I/Y PV +/PMT

key, and an FV of $563.71 is displayed.

to get $421.24.

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Interest Conversion The following equation is used to convert a nominal rate to an effective rate.
Given: kNom = 10% and m = 12 payments/year,
However, its much easier to convert the nominal rate using the calculator. First, we need to set the calculator to 12 payments per year:

2nd I CONV ENTER

The effective rate of 10.47 percent is displayed on the screen. Cash Flow Operations Example 1: Uneven Cash Flows We can also find the PV, FV, and IRR (internal rate of return) of a series of unequal cash flows. Assume the following cash flows: 4 10% /))))))))3))))))))3))))))))3))))))))What is the PV of these CFs? First clear the BAII PLUS and make sure that periods/year is set equal to 1. Enter the cash flow worksheet by pressing

CLR WORK CF

then clear any previous cash flow analyses,
. Next, enter the cash flows:
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ENTER ENTER ENTER ENTER ENTER
Sets CF0 equal to 0 and moves to CF1. Sets CF1 equal to 50 and moves to frequency of occurrence of CF1. Tells calculator that the $50 CF occurs only once.

ENTER ENTER ENTER ENTER

The CFs from the time line are entered. Now enter the interest rate.
At this point the BAII PLUS knows the cash flows, the number of periods, and the interest rate. To find the PV, press
to get PV = NPV = $377.40.
Example 2: Embedded Annuities We have these cash flows, which contain embedded annuities: 0 10% 9
/)))))))3))))))3))))))3))))))3))))))3))))))3))))))3))))))3)))) ))300 Whats the PV? Clear, set P/YR = 1 if changed. First enter the cash flow worksheet by pressing CLR WORK. Next, enter the cash flows:
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Sets CF0 equal to 0 and moves to CF1. Sets CF1 equal to 100 and moves to frequency of occurrence of CF1. Tells calculator that the $100 CF occurs three consecutive times.

ENTER ENTER

Now the BAII PLUS knows the cash flows. Thus, enter the interest rate:
At this point the BAII PLUS knows the cash flows, the number of periods, and the interest rate. To find the PV, press CPT to get PV = NPV = $1,099.94. To check your entries:

then use the up and down arrow keys to view each cash flow.
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Example 3: The Rate of Return Offered by an Investment (IRR)1 Assume that we invest $1,000 now (t = 0) and then expect to receive an uneven set of cash flows. Here is the CF time line: 4 /))))))))3))))))))3))))))))3))))))))1 -600 What rate of return will we earn? First enter the cash flow worksheet by pressing CLR WORK. Next, enter the cash flows: 1000 300

+/ENTER ENTER CF

Sets CF0 equal to -1,000 and moves to CF1. Sets CF1 equal to -1000 and moves to frequency of occurrence of CF1. The second tells calculator that the $300 CF occurs only once.2

ENTER ENTER ENTER

Now the BAII PLUS knows the cash flows. Thus, simply press percent is displayed.

and the IRR of 16.71

If a negative CF occurs at the end of a projects life, or if a sequence of cash flows has two or more sign changes, there may be multiple IRR solutions. The calculator displays the IRR closest to zero. However, the displayed solution has no financial meaning. Thus, you should use caution in making investment decisions based on an IRR computed for a cash flow stream with more than one sign change. When you are solving very complex cash flow problems, the calculator may not be able to find IRR, even if a solution exists. When this is the case, the calculator displays Error 7 (iteration limit exceeded). If you do not enter a value for frequency after you enter the cash flow value, the calculator assumes a value of 1; however, the down arrow key must be pressed again before entering the next cash flow.
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You can also determine the NPV of the investment. Leave data entered and then enter the opportunity cost interest rate, say 8 percent. To find NPV press
The NPV of $220.50 is displayed. Thus, the PV of the cash inflows exceeds the cost of the investment by $220.50.
Statistical Calculations The BAII PLUS can also be used for several types of statistical calculations. Mean and Standard Deviation (F ) Year 1996 Sales $260
Whats the mean (average) and standard deviation (F) of sales over the 3 years? First select the data-entry portion of the statistics worksheet by pressing CLR WORK previous data entries, 2nd. Next, enter the data: 150

ENTER 2nd DATA

then clear any
This enters 150 as the data entry and tells the calculator there is no Y-variable associated with the X variable. This enters 95 as the second data entry and tells the calculator there is no Y-variable associated with the X variable. This enters 260 as the third data entry and tells the calculator there is no Y-variable associated with the X variable.

2nd STAT

95 260
Now select the statistical calculation portion of the statistics worksheet by pressing CLR WORK clear any previous statistical entries, 2nd.

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LIN should now be displayed on the screen. Keep pressing 2nd then SET until 1-V (one variable calculation method) is displayed. Press the down arrow key three times to view (1) sample size, n, (2) mean, , and (3) standard deviation, Sx. The mean equals $168.33. The standard deviation is $84.01. Linear Regression Beta coefficients can be calculated by using the BAII PLUSs linear regression capabilities. The X (independent variable) and Y (dependent variable) values must be entered in the proper sequence, where the X data is on the horizontal axis (market) and Y data is on the vertical axis (stock). Year ____ 5 Market (km __________ ) 23.8% -7.2 6.6 20.5 30.6 Stock (k ________j) 38.6% -24.7 12.3 8.2 40.1

2nd DATA

First select the data-entry portion of the statistics worksheet by pressing CLR WORK previous statistical entries, 2nd. Next, enter the data as follows: 23.8 38.6 7.2 24.7 6.6 12.3 20.5 8.2 30.6 40.1
This enters 23.8 as the first X variable.
This enters 38.6 as the first Y variable. This enters -7.2 as the second X variable. This enters -24.7 as the second Y variable. This enters 6.6 as the third X variable. This enters 12.3 as the third Y variable. This enters 20.5 as the fourth X variable. This enters 8.2 as the fourth Y variable. This enters 30.6 as the fifth X variable. This enters 40.1 as the fifth Y variable.
+/ENTER ENTER ENTER ENTER
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LIN should now be displayed on the screen. Keep pressing 9 until a = appears on the screen. This is the value of the y-intercept of the regression line. Press 9 one more time and b = appears one the screen. This is the value of the slope of the regression line. If you press 9 one more time, r = appears on the screen. This is the value of the correlation coefficient of the regression line. (The intercept value is -8.92, the slope value is 1.60, and the correlation coefficient is 0.91.) Clear the calculator by pressing

2nd DATA 2nd CLR WORK

Amortization The BAII PLUS can also be used to calculate amortization schedules. First, clear the TVM registers by QUIT 2nd CLR TVM pressing 2nd. Example: Determine the interest and principal paid each year and the balance at the end of each year on a three-year $1,000 amortizing loan which carries an interest rate of 10 percent. The payments are due annually. First, check payments/year and be sure its 1. ( Now perform the following steps: 1000
N I/Y PV 2nd P/Y 2nd QUIT
A payment of -402.11 is displayed.
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Now we will use the amortization worksheet to generate an amortization schedule for the loan:

2nd AMORT 2nd CLR WORK

Enters the Amort worksheet and clears any old contents. Ending period set at 1 because we want to view the amortization information for each and every payment.

Now just use the down arrow key to view the balance after the payment as well as the interest and principal portions of the first payment. To view the results for the second payment, press to move to P1," press CPT and use the down arrow key to view the ending balance after the payment is made as well as the interest and principal portions of the second payment. Repeat for the third and last payment. This is the amortization schedule corresponding to the loan. Beg. Bal. 1,000.00 697.89 365.57 Payment 402.11 402.11 402.11 Interest 100.00 69.79 36.56 Princ. Repmt. 302.11 332.32 365.55 Ending Bal. 697.89 365.57.02