BAIIcalculator

BAIIcalculator - Using the TI BA II Plus for Actuarial...

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Using the TI BA II Plus for Actuarial Finance Calculations Introduction . This manual is being written to help actuarial students become more efficient problem solvers for the Part II examination of the Casualty Actuarial Society and the Society of Actuaries –and better investment analysts in the process. The enhanced capabilities of the TI BA II Plus calculator allow the automated solution of problems which once required a long series of calculations using specialized formulas and table lookups. Times have changed. In 1962 a friend (a banker, not an actuary) spent 48 hours finding an internal rate of return that the TI BA II Plus will now find in a few seconds. 1 Today that same banker expects such problems to be solved immediately using modern technology. The reader who is studying for actuarial examinations should be aware that the calculator is an accessory and does not replace knowledge of the basic theoretical structure. The exams still require formulas to be memorized and manipulated. The modern technology makes some practical problems much easier to solve. It does not guarantee success on actuarial examinations. It can be helpful. This is not a calculator key instruction manual. We will review some keystroke basics in the next section, but the ultimate goal is not instruction in how to punch keys. The goal is to illustrate how to be quick when that is possible. We will assume that the reader has studied (or is studying) the theory of interest and has been introduced to terms such as annuity, net present value, yield and internal rate of return. Using the TI BA II Plus ™ Hassett and Stewart 1 1 The BA 35 calculator has many useful features, but the BA II Plus has a number of useful additions and is substantially more powerful. The internal rate of return feature is one of the most useful of the additions.

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1) Review of features of the calculator . The TI BA II Plus comes with an instructional manual, and we will assume that actuarial students can and will read this. We will review some features of the calculator that are extremely useful. Formatting . To see format options use the keystrokes 2nd FORMAT (FORMAT is displayed above the . key) You are then able to make format selections. The first format selection shown will be the number of decimal places to display. This is a personal choice, but it is worth noting that entering 9 as your choice will give up to 9 places while showing only the relevant number of decimal places. To try this, use the keystrokes 9 ENTER Then 6×9 will show as 54. , while 1/3 will display as .333333333 . 2 You can review other format options by scrolling down using the key. The next format selection is DEG for degrees. If you wish to set the calculator to use radians, use the keystrokes 2nd SET (SET is displayed above the ENTER key).
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