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Chapter 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 20010101...
2-1-1 Before Performing Financial Calculations 2-1 Before Performing Financial Calculations k k k k k TVM Mode On the Main Menu, select the TVM icon. * The above shows the ALGEBRA FX 2.0 PLUS screen. Entering the TVM Mode displays the Financial screen like the one shown below. Financial 1 screen Financial 2 screen •...
2-1-2 Before Performing Financial Calculations k k k k k SET UP Items u u u u u Payment • {BGN}/{END} ..Specifies {beginning of the period} / {end of the period} payment u u u u u Date Mode •...
2-2-1 Simple Interest 2-2 Simple Interest This calculator uses the following formulas to calculate simple interest. u u u u u Formula SI' = n 365-day Mode : interest : number of interest SI' = n periods 360-day Mode : principal : annual interest : principal plus interest SI = –SI'...
2-2-2 Simple Interest • An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following function keys to maneuver between calculation result screens. • 1(REPT) ... Parameter input screen • 6(GRPH) ... Draws graph After drawing a graph, you can press 1(TRACE) to turn on trace and read calculation results along the graph.
2-3-1 Compound Interest 2-3 Compound Interest This calculator uses the following standard formulas to calculate compound interest. u u u u u Formula I (1+ i S) (1+ i) –1 PV+PMT + FV i(1+ i) (1+ i) Here: : present value PV= –(PMT + FV : future value...
2-3-2 Compound Interest FV = – (PMT n + PV ) PV + FV PMT = – PV + FV n = – • A deposit is indicated by a plus sign (+), while a withdrawal is indicated by a minus sign (–). u u u u u Converting between the nominal interest rate and effective interest rate The nominal interest rate ( % value input by user) is converted to an effective interest rate...
2-3-3 Compound Interest Press 2(CMPD) from the Financial 1 screen to display the following input screen for compound interest. 2(CMPD) ........number of compound periods ....... annual interest rate ....... present value (loan amount in case of loan; principal in case of savings) ......
2-3-4 Compound Interest After configuring the parameters, press one of the function keys noted below to perform the corresponding calculation. • 1(n) .... Number of compound periods • 2(I ) ..Annual interest rate • 3(PV) ..Present value (Loan: loan amount; Savings: balance) •...
2-4-1 Cash Flow (Investment Appraisal) 2-4 Cash Flow (Investment Appraisal) This calculator uses the discounted cash flow (DCF) method to perform investment appraisal by totalling cash flow for a fixed period. This calculator can perform the following four types of investment appraisal. •...
2-4-2 Cash Flow (Investment Appraisal) u u u u u PBP when NPV > 0 (when investment can be recovered). PBP is the value of • Press 3(CASH) from the Financial 1 screen to display the following input screen for Cash Flow.
2-4-3 Cash Flow (Investment Appraisal) After drawing a graph, you can press 1(TRACE) to turn on trace and read calculation results along the graph. Press i to turn off trace. Press i again to return to the parameter input screen. 20010101...
2-5-1 Amortization 2-5 Amortization This calculator can be used to calculate the principal and interest portion of a monthly installment, the remaining principal, and amount of principal and interest repaid up to any point. u u u u u Formula ;;;;;...
2-5-2 Amortization u u u u u Converting between the nominal interest rate and effective interest rate The nominal interest rate ( % value input by user) is converted to an effective interest rate %') for installment loans where the number of installments per year is different from the number of compound interest calculation periods.
2-5-3 Amortization After configuring the parameters, press one of the function keys noted below to perform the corresponding calculation. • 1(BAL) ..Balance of principal after installment PM2 • 2(INT) ..Interest portion of installment PM1 • 3(PRN) ..Principal portion of installment PM1 •...
2-6-1 Interest Rate Conversion 2-6 Interest Rate Conversion The procedures in this section describe how to convert between the annual percentage rate and effective interest rate. u u u u u Formula : annual percentage rate (%) APR/100 EFF = –1 : effective interest rate (%) number of compoundings...
2-7-1 Cost, Selling Price, Margin 2-7 Cost, Selling Price, Margin Cost, selling price, or margin can be calculated by inputting the other two values. u u u u u Formula CST = SEL 1– : cost : selling price SEL = MRG : margin 1–...
2-8-1 Day/Date Calculations 2-8 Day/Date Calculations You can calculate the number of days between two dates, or you can determine what date comes a specific number of days before or after another date. Press 2(DAYS) from the Financial 2 screen to display the following input screen for day/ date calculation.
2-8-2 Day/Date Calculations Input the month, day, and year, pressing w after each. After configuring the parameters, press one of the function keys noted below to perform the corresponding calculation. • 1(PRD) ..Number of days from d1 to d2 (d2 – d1) •...
2-9-1 Depreciation 2-9 Depreciation Any of the following four methods can be used to calculated depreciation. u u u u u Straight-Line Method The straight-line method calculates depreciation for a given period. (PV–FV ) {Y–1} : depreciation charge for the year useful life in years (PV–FV )
2-9-2 Depreciation u u u u u Sum-of-the-Year's Digits Method The sum-of-the-year's-digits method calculates depreciation for a given period. n (n +1) {Y–1} n' = n – (n' integer part +1)(n' integer part + 2*n' fraction part ) Z' = {Y–1} (PV –...
2-9-3 Depreciation Press 3(DEPR) from the Financial 2 screen to display the following input screen for depreciation. 6(g)3(DEPR) ........useful life in years % ....... depreciation rate/factor ....... original cost (basis) ....... scrap value (salvage value) ........year Y– 1 ......number of depreciable months in first year •...
2-9-4 Depreciation • An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following function keys to maneuver between calculation result screens. • 1(REPT) ..Parameter input screen • 6(TABL) ..Calculation result table The following function keys are on the calculation result table screen. •...
2-10-1 Bonds 2-10 Bonds The bond calculation function calculates the price and yield of a bond. u u u u u Formula Redemption date Issue date Purchase date Coupon Payment dates : price per $100 of face value : annual coupon rate (%) : yield to maturity (%) : accrued days : number of coupon payments per year (1=annual, 2=semi annual)
2-10-2 Bonds Press 4(BOND) from the Financial 2 screen to display the following input screen for band calculation. 6(g)4(BOND) d1 ........ purchase date d2 ........ redemption date RDV ......redemption price or call price per $100 of face value CPN ......annual coupon rate (%) PRC ......
2-10-3 Bonds • An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following function keys to maneuver between calculation result screens. • 1(REPT) ..Parameter input screen • 5(MEMO) ..Screen of various bond calculation values* •...
2-11-1 TVM Graph 2-11 TVM Graph The TVM Graph lets you assign two of the five parameters ( ) to the -axis and -axis of a graph, and plot changes in as the value of changes. Press 5(TVMG) from the Financial 2 screen to display the following input screen for TVM Graph.
2-11-2 TVM Graph Pressing 6(Y-CAL) after drawing a graph displays the screen shown below. -axis value on this screen and pressing w displays the corresponding Inputting an -axis value. Press i again to return to the parameter input screen. • Calculation may take some time to perform when you specify % as the -axis parameter.
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