Now press Enter and then 2nd CPT (Quit) to return to a blank screen. BA II Plus™ Professional tutorials Punch the numbers and crunch the data. endstream endobj 101 0 obj <>stream Now to find the future value simply press CPT (compute) and then the FV key. © 1995 - 2020 by Timothy R. Mayes, Ph.D. Assume that you can earn 9% per year on your investment. Texas Instruments BAII Plus Tutorial for Use with Fundamentals 11/e and Concise 5/e This tutorial was developed for use with Brigham and Houston’s Fundamentals of Financial Management, 11/e and Concise, 5/e, especially Chapter 2, the Time Value of Money. ���y�-�S���2i�IQV�e\ ��D1d�'�5��P���g�3�ʤ��{ϫe9a�~���#��f��8��f�G.����6L�0��J��]��I����'�����0ˮ�A�=꤅���L�oz���G�XR{�v^b�CB^���ׇ;��.�s9�9'�}·I��ޭ�������������/ّ��"�b~�Ň��DְȚWG�y�?�=��,�5P 8�5�/dz��9��mǾ[ot��S��� ��l���Zy:[�rF�U��m9س1r�$�:�v���6��'��j2�������֡��k4������I�D��;���*ܾ�����6״�Fе�M$S�Ȟ�m9ە�[e�{�쐄�Z֒��d�eш���&6i�ܹ��MTC�7�w"���U��ٙ���*�;�Ry$�ۭ i�����C8�|�x���� In this case, we already know the future value ($100,000), the number of periods (18 years), and the per period interest rate (8% per year). Simply enter 10 into. The calculator’s 110-page manual covers all of its functions in detail, and it is If you don't, you will quickly learn that if you enter wrong numbers you will get wrong answers. That's exactly what I have been wanting for years. Remember, the calculator only knows what you tell it, it doesn't know what you really meant. All rights reserved, understand the calculations that the calculator is doing, Every time value of money problem has either 4 or 5 variables (corresponding to the 5 basic financial keys). Learn how to do advanced calulator functions using the BAII Plus calculator for the CFA ® exam from Kaplan Schweser’s Dr. Doug Van Eaton, CFA. One important thing to remember is that the present value will always (unless the interest rate is negative) be less than the future value. This is not enough. That's it, the calculator is ready to go. If you get this error, just press CE\C to clear it and then fix the problem by changing the sign of either PV or FV. Now press CPT N and you will see that it will take 8.04 years for your money to double. Or, perhaps you are thinking of making an investment and you would like to know what rate of return you need to earn to reach a certain future value. Suppose that you are planning to send your daughter to college in 18 years. Why? When we entered the interest rate, we input 10 rather than 0.10. One adjustment is important. In this case, we have a 4-variable problem and were given 3 of them (N, I/Y, and PV) and had to solve for the 4th (FV). endstream endobj 98 0 obj <> endobj 99 0 obj <> endobj 100 0 obj <>stream In this step-by-step tutorial, we walk you through how to obtain the Modified Duration value using a Texas Instrument BA II Plus financial calculator. � z�(#�CCD�#�1B���\�bRJty�y��:�)}S&A��.�~�n�*���&�&������ƇA���mm��6�]8*�Y�� ] �X�T�nw���~\�9�$���������Q���������Zm2�����]X�+g*��)��[�,��M�R��a4��4^����8�~�2���D��`6,a��x��*I�|'+U��=�8�l|�Ja��E�~�����U��fK���85CO6%�Uq��z�"U��R���{>=W�\$�*/���Q�A���� Well, the compounding assumption is hidden from view and in my experience people tend to forget to set it to the correct assumption. The answer you get should be 161.05. Your TI-BA II Plus Statistical Functions (use at your own risk). Note that in our original problem we assumed that you would earn 8% per year, and found that you would need to invest about $25,000 to achieve your goal. Sometimes you know how much money you have now, and how much you need to have at an undetermined future time period. When you have solved a problem, always be sure to give the answer a second look and be sure that it seems likely to be correct. 111 0 obj <>/Filter/FlateDecode/ID[<05777E79B7AEEFCA358C33A58AD95672><7647E19EC5A29D46ADB852AD68A1AB55>]/Index[97 27]/Info 96 0 R/Length 75/Prev 140355/Root 98 0 R/Size 124/Type/XRef/W[1 2 1]>>stream For example, suppose that we wanted to find out the future value if we left the money invested for 10 years instead of 5. Sample Problem: A bond pays 6% coupon payments, semi-annually. You may have to use the arrow keys to scroll through the list of options until you see DEC = 2 (or whatever the current number is). Furthermore, assume that you have determined that you will need $100,000 at that time in order to pay for tuition, room and board, party supplies, etc. To change this, press the 2nd key, then press I/Y. Of course, most people don't recognize a wrong answer when they get one, so they blithely forge ahead. You need to set the payments per year to one. Well, the compounding assumption is hidden from view and in my experience people tend to forget to set it to the correct assumption. Unlike other financial calculators, the BAII Plus Professional comes from the factory set to assume annual compounding (others default to monthly compounding which is less than optimal). In this case, though, we assumed that you started with only $20,000. 123 0 obj <>stream Please continue on to part II of this tutorial to learn about using the BAII Plus Professional to solve problems involving annuities and perpetuities. Press 2nd FV (CLR TVM) to clear the memory. Posted By: Kaplan Schweser Updated: August 18, 2020. In this problem, the $100 is the present value (PV), there are 5 periods (N), and the interest rate is 10% (I/Y). Maybe you have recently sold an investment and would like to know what your compound average annual rate of return was. H�l�ˮ�0��y�Y�R��N�&KzP�#!a� V�6A�T��r^�<1c�iKA]x�����{��+��mu��Z }�����T0 �d�d��8E1K�@�}�f�/���d�T0A~�cCc�`���c?�����H9� �}����v���q_�i �SvmeK[,�%6��c#x�&@�/��欘�,�w�2]����U�^���++���p�zg,'�m�p��>L��4��SZ/j4� �����K1Y�My2�JFη�qr7�p�:,�� Why? Personally, I like to see five decimal places, but you may prefer some other number. Calculate the modified duration on the bond. However, we can easily find the exact answer using the BAII Plus calculator. If it isn't there, please drop me a note and I'll try to answer the question. h�b```f``2b`a`�a`@ �+sL��vpq5r.e�ź�#�m*�. Now press CPT PV and you will see that you need to invest $25,024.90 today in order to meet your goal.

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