HP 10BII Quick Start Manual page 5

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VIDEO 2

TIME VALUE OF MONEY INTRODUCTION

2.1 The 5 Time Value of Money Keys (The Top Row)

There are 5 fundamental "time value of money" keys on the top row of the HP10BII calculator. They are:

The number of time "periods". Note: this is not always

the number of years, rather the number of "periods" (i.e

12 periods in a year, 4 periods in a quarter).

I/YR The "rate", "interest rate", or "yield".

PV Present Value is the "worth" today of money received or

paid.

Future Value is the "worth" in the future of money

received or paid.

PMT The payment. Investors receive (or pay) a series of

payments throughout the holding cycle of an investment.

Payments can be positive or negative. The notation used to

make a number "negative" is referred to as "sign convention".

NOTE: In this workbook, a negative sign convention will be

denoted by "< >" or "-".

2.2 The Relationship of "I/YR" and "N"

When performing time value of money calculations, you will need to preset the calculator for the correct number or

payments per year to make the conversions required for I/YR and N.

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