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# appendcalculator - AppmhbrROSS_36076 9:15 AM Page 551...

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551 APPENDIX D Using the HP-10B and TI BA II Plus Financial Calculators This appendix is intended to help you use your Hewlett-Packard HP- 10B or Texas Instruments BA II Plus financial calculator to solve prob- lems encountered in the introductory finance course. It describes the various calculator settings and provides keystroke solutions for nine selected problems from this book. Please see your owner’s manual for more complete instructions. For more examples and problem-solving techniques, please see Financial Analysis with an Electronic Calcula- tor, Fourth Edition, by Mark A. White (New York: The McGraw-Hill Companies, 2000). CALCULATOR SETTINGS Most calculator errors in the introductory finance course are the result of inappropriate settings. Before beginning a calculation, you should ask yourself the following questions: 1. Did I clear the financial registers? 2. Is the compounding frequency set to once per period? 3. Is the calculator in END mode? 4. Did I enter negative numbers using the key? Clearing the Registers All calculators have areas of memory, called registers, where variables and intermediate results are stored. There are two sets of financial reg- isters, the time value of money (TVM) registers and the cash flow (CF) registers. These must be cleared before beginning a new calculation. On the Hewlett-Packard HP-10B, pressing {CLEAR ALL} clears 1 / 2 both the TVM and the CF registers. 1 To clear the TVM registers on the BA II Plus, press {CLR TVM} . Press {CLR Work} from within the cash flow worksheet to clear the CF registers. Compounding Frequency Both the HP-10B and the BA II Plus are hardwired to assume monthly compounding, that is, compounding 12 times per period. Because very few problems in the introductory finance course make this assump- tion, you should change this default setting to once per period. On the HP-10B, press 1 {P/YR} . To verify that the default has been changed, press the key, then press and briefly hold the key. 2

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