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AF_Ch02 - Chapter Financial Calculation(TVM 2-1 2-2 2-3 2-4...

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Financial Calculation (TVM) 2-1 Before Performing Financial Calculations 2-2 Simple Interest 2-3 Compound Interest 2-4 Cash Flow (Investment Appraisal) 2-5 Amortization 2-6 Interest Rate Conversion 2-7 Cost, Selling Price, Margin 2-8 Day/Date Calculations 2-9 Depreciation 2-10 Bonds 2-11 TVM Graph 2 Chapter 20010101
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20010101 2-1 Before Performing Financial Calculations k TVM Mode On the Main Menu, select the TVM icon. Entering the TVM Mode displays the Financial screen like the one shown below. Financial 1 screen Financial 2 screen 1 (SMPL) .... Simple interest 2 (CMPD) ... Compound interest 3 (CASH) .... Cash flow (investment appraisal) 4 (AMT) ...... Amortization 5 (CNVT) .... Interest rate conversion 6 ( g ) 1 (COST) ... Cost, selling price, margin 2 (DAYS) ... Day/date calculations 3 (DEPR) ... Depreciation 4 (BOND) ... Bonds 5 (TVMG) ... TVM (compound interest simulation) graph 2-1-1 Before Performing Financial Calculations * The above shows the ALGEBRA FX 2.0 PLUS screen.
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20010101 k SET UP Items u Payment • { BGN }/{ END } ........ Specifies {beginning of the period} / {end of the period} payment u Date Mode • { 365 }/{ 360 } ......... Specifies calculation according to a {365-day} / {360-day} year u Periods/YR. (Bond) • { Annual }/{ SEMI } ... Indicates an {annual} / {semi-annual} period Note the following points regarding SET UP screen settings whenever using the Financial Mode. Drawing a financial graph while the Label item is turned on, displays the label CASH for the vertical axis (deposits, withdrawals), and TIME for the horizontal axis (frequency). Axis labels do not appear on the TVM graph. The number of display digits applied in the Financial Mode is different from the number of digits used in other modes. The calculators automatically reverts to Norm 1 whenever you enter the Financial Mode, which cancels a Sci (number of significant digits) or Eng (engineering notation) setting made in another mode. k Graphing in the TVM Mode After performing a financial calculation, you can use 6 (GRPH) to graph the results as shown below. • Pressing 1 (TRACE) while a graph is on the display activates Trace, which can be used to look up other financial values. In the case of simple interest, for example, pressing e displays PV , SI , and SFV . Pressing d displays the same values in reverse sequence. Zoom, Scroll, and Sketch cannot be used in the Financial Mode. • Whether you should use a positive or a negative value for the present value (PV) or the purchase price (PRC) depends on the type of calculation you are trying to perform. Note that graphs should be used only for reference purposes when viewing TVM Mode calculation results. • Note that calculation results produced in this mode should be regarded as reference values only. Whenever performing an actual financial transaction, be sure to check any calculation results obtained using this calculator with against the figures calculated by your financial institution.
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