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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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
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
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
key).
The display will show RAD for radians. You can return to degrees by repeating
the keystrokes above. To finalize the selection you desire, scroll down using the
key.
The upper right corner of the display will show the indicator RAD if
that choice is made. There will be no indicator if DEG is selected.
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 Fall '09
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 Time Value Of Money, Interest, Net Present Value, TI BA, ba ii plus, TI BA II Plus

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