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finmath_note

# finmath_note - It is easier to work with i(periodical...

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Set up financial calculator TI – Ba II Plus 1) Using algebraic mode: 2 nd format arrow down 2 nd set to AOS 2) Decimal points: 2 nd format arrow down to dec= 4 enter 3) Make sure 1P/YR and End mode: 2 nd P/Y 1 enter 2 nd BGN 2 nd set make sure it is END 4) Clear entries before new calculation: 2 nd cleartvm (ce/e clears the screen) 6 n, 2i, 600 pv, cpt pmt 17BII: 1) Using algebraic mode: shift modes alg 2) Decimal points: dsp fix 4 input 3) Make sure 1P/YR and End mode: fin tvm other 1 P/YR END exit 4) Clear entries before new calculation: shift cleardata (clr clears the screen) Fin Tvm 6n, 2i, 600pv, pmt 12c 1) Uses: Reverse Polish Notation 2) Decimal points: f 4 (displays 4 decimal points, but uses 10 in calculation) 3) Make sure 1P/YR and End mode: already 1 P/YR g END exit 4) Clear entries before new calculation: f clearfin (clx clears the screen) 6 n, 2i, 600 pv, pmt Notes to Financial Math
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Unformatted text preview: It is easier to work with i (periodical interest rate) than I%YR (annual interest rate). Relabel I%YR button in calculator as i and use it as i . Relabel P/YR (payment per year) as P/Period (payment per period). The relabelling will help you determine the appropriate interest rate and time period in TVM calculation. (See example compounding multiple time per year). The formulae do not use the TVM convention of signing cash outflows negative and cash inflows positive. However, financial calculators and Excel do use the inflow/outflow convention. The formulae use real number (0.1); the calculator uses percentage (10). Use formulae for calculation of perpetuity, growing perpetuity, and growing annuity. Bond yield to maturity is nominal rate (APR) rather than effective rate. It is normal to be confused by this convention....
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