CalculatorGuideBAII+

FeaturesfortheFRM?ExamIntroduceyourFinancialCalculatorSettingupyourCalculatorMainFunctionkey:ForexampleON/OFFonthetopright–turnonandoffyourcalculator。TimevalueofMoneyFunctionKeys

PVPresentValue，F(xiàn)VFutureValue，PMTPeriodicPayment，NNumberofPeriods，I/YInterestRatesSub-FunctionKey:Press2NDSettinguptheBAII+Changingthedecimalpoints:Moststudentsprefertouseupto9decimalpoints(thiswillremovetheextrazerosfromthescreen).2nd→·DEC=9→ENTERWithdecimalssetto“9”youwillalwayshavethemaximumaccuracyinyouranswer,andcanroundittothenumberofplacesthatwillsuittheproblem.Chn &AOSChainmode2+3×5=25AOSmode2+3×5=17√X,X2,1/X,and+/-Thesekeyscanbeusedduringanycalculationandoperateonthenumberinthedisplayonly100√xdisplays105x2displays2551/xdisplays0.205+/-displays–50.89/(√2.17)×7.32=0.89÷2.17√×7.3X2 =0.89×2.17√1/X×7.3X2ExponentsyxExample:calculate1.755Enter1.75yx5=todisplay16.4131Example:calculate(3.54/2.21)1/4-1Enter3.54÷2.21yx41/x-1OR 3.54÷2.21yx0.25-1 todisplay0.125ExponentsyxExample:The90-dayholdingperiodreturnonaT-billis1.237%.Whatistheeffectiveannualyield?Weneedtocalculate1.01237365/90-1Thereare(atleast)2ways.1.01237yx365yx901/x=[1.0511]1.01237yx(365÷90)=[1.0511].CleartheMemoryKeysMiscellaneousThearrow“→”removesthelastdigitenteredfromthedisplay2ndANSdisplaysthepreviousresultafteryouhavebeguntoenteranewvalue.UsingtheMemoryFunctionsTheBAII+allowsyoutostoreupto10itemsinthememoryatanyonetime.Thiscanmassivelyspeedupcalculationsintheexam!TostoreaniteminthememoryWhenyouhavethenumberonscreentostoreitsimplypress:STO→0-9TorecallaniteminthememoryRCL→0-9Storing/RetrievingResults1/1.13=0.88496STO11.10/1.132=0.86146STO21.21/1.1331.21/(1.13yx3)+RCL1+RCL2=2.585TimeValueandYourCalculatorCalculatornotation:–N=numberofyearsornumberofpayments–I/Y=interestrateperperiod–PV=presentvalue–FV=futurevalue–PMT=payments(forannuities)TimeValueandYourCalculator+FV-PMT-PV-PMT-PMT-PMT-PMTFVofSingleSumWhatisthefuturevalueof$200investedtodayforfouryearswhentheinterestrateis10%N=4I/Y=10PV=-200PMT=0FV=?FV=292.82PVofSingleSumWhatisthepresentvalueof$200tobereceivedinfouryearswhentheinterestrateis10%N=4I/Y=10PV=?PMT=0FV=200PV=-136.60PVofanOrdinaryAnnuityOrdinaryannuity:AstreamofequalCFsatequalintervalspaidatendofeachperiodFortheaboveproblemwekeepthecalculatorinENDmodeindicatingthatthecashflowsariseattheendofperiods N=4I/Y=10PV=?PMT=200FV=0PV=-633.97FVofanOrdinaryAnnuityN=4I/Y=10PV=0PMT=-200FV=?FV=928.2PVofanAnnuityDueAnnuityDue:CFsatthebeginningofeachperiodthereforewewillneedthecalculatorinBGNmode.NotethatT1isapointintimeandrepresentstheendofthefirstperiodorthebeginningofthesecondperiodN=4I/Y=10PV=?PMT=200FV=0PV=-697.37CleartheMemoryKeysTimeValueofMoneyKeysThecurrentassetbaseofyourclientis100,000,everymonth,hecouldinvestanother1000,ifthereturnonhisinvestmentis8%perannual,howmanyyearslatercouldyourclientaccumulate500,000toprepareforhisretirement

N=?I/Y=8/12PV=100,000PMT=1,000FV=-500,000CPTN=143.80，÷12=11.98After12years,hecouldreachhistargetandstarttoretire.TimeValueofMoneyKeysExample:Yourclienthasborrowedamortgageloanof500,000,themortgagerateis6%、thetenoroftheloanis20year，theclientwillpaythesameamountofcashtopaybacktheloaneachmonth，whatwillbehismonthlypayment?N=240I/Y=6/12=0.5PV=500,000PMT=?FV=0PMT=-3582.15ValuingaSemiAnnualCouponBondBuzackyLTDissuedabondsomeyearsago.Thebondhas3completeyearsoutstandingandpaysa8%semiannualcoupon.BondofequivalentriskhaveBEYsof10%inthemarket.Whatisthecurrentprice?Numberofperiods3x2=6Periodiccoupon=$80/2=$40Discountrate=10%/2=5%Redemptionvalue=$1,000N=6 I/Y=5PV=?PMT=40FV=1000PV=-949.24CalculatingYTMBuzackyLtdissuedabondsomeyearsago.Thebondhas3completeyearsoutstandingandpaysa8%semiannualcoupon.Thebondiscurrentlytradingat$895inthemarket.Whatistheyieldonthebond?N=6 I/Y=?PV=-895PMT=40FV=1000I/Y=12.29TheParksplantotakethreecruises,oneeachyear.Theywilltaketheirfirstcruise9yearsfromtoday,thesecondcruiseoneyearafterthat,andthethirdcruise11yearsfromtoday.Thetypeofcruisetheywilltakecurrentlycosts$5,000,buttheyexpectinflationwillincreasethiscostby3.5%peryearonaverage.Theywillcontributetoanaccounttosaveforthesecruisesthatwillearn8%peryear.Whatequalcontributionsmusttheymaketodayandeveryyearuntiltheirfirstcruise(tencontributions)inordertohavesavedenoughatthattimeforallthreecruises?Theypayforcruiseswhentaken.Inflationrate=3.5% periodicinterestrate=8%Costoffirstcruise=5000×1.0359=6814.49Costofsecondcruise=5000×1.03510=7052.99Costofthirdcruise=5000×1.03511=7299.85FV=6814.49×1.08+7052.99+7299.85÷1.08=21171.76Annuitymode:BGNN=10I/Y=8PV=0PMT=?FV=-21171.76PMT=1353.22AnotherperspectiveAninvestment(abond)willpay$1,500attheendofeachyearfor25yearsandonthedateofthelastpaymentwillalsomakeaseparatepaymentof$40,000.Ifyourrequiredrateofreturnonthisinvestmentis4%,howmuchwouldyoubewillingtopayforthebondtoday?N=25I/Y=4PV=?PMT=1500FV=40000PV=-38437.79Aninvestment(abond)willpay$750attheendofeachhalf-yearfor25yearsandonthedateofthelastpaymentwillalsomakeaseparatepaymentof$40,000.Ifyourrequiredrateofreturnonthisinvestmentis4%,howmuchwouldyoubewillingtopayforthebondtoday?N=50I/Y=2PV=?PMT=750FV=40000PV=-38428.82Abankquotescertificateofdeposit(CD)yieldsbothasannualpercentagerates(APR)withoutcompoundingandasannualpercentageyields(APY)thatincludetheeffectsofmonthlycompounding.A$100,000CDwillpay$110,471.31attheendoftheyear.CalculatetheAPRandAPYthebankisquoting.N=12I/Y=?PV=-100000PMT=0FV=110471.31I/Y=0.833APR=0.833%×12=10%100000×(1+APY)=110471.31APY=10.471%Aclienthas$202,971.39inanaccountthatearns8%peryear,compoundedmonthly.Theclient's35thbirthdaywasyesterdayandshewillretirewhentheaccountvalueis$1million.A.Atwhatagecansheretireifsheputsnomoremoneyintheaccount?B.Atwhatagecansheretireifsheputs$250permonthintotheaccounteverymonth,beginningonemonthfromtoday?N=?I/Y=0.667PV=202971.39PMT=0FV=-1000000N=24035+20=55N=?I/Y=0.667PV=202971.39PMT=250FV=-1000000N=220.02535+18.335=53.335Aborrowerisconsideringtoborrowonthemortgageis$100,000withmonthlycompounding.AssumingtheARMisresetat5.500%(i.e.,theremainingbalanceontheloanwillnowberepaidwith5.500%nominalannualinterest),whichofthethreeloanswillhavethesmallestmonthlypaymentaftertherateresetattheendofYear3?Paymentonthe30-yearfixedis:N=360I/Y=(5/12)=0.41667PV=100,000FV=0calculatePMT=-536.82Paymentonthe15-yearfixedis:N=180I/Y=(4.385/12)=0.36542PV=100,000FV=0calculatePMT=-759.13CalculationsfortheARMInitialpayment:N=360I/Y=(3.75/12)=0.31250PV=100,000FV=0calculatePMT=463.12BalanceatendofYear3:N=324I/Y=(3.75/12)=0.31250FV=0PMT=463.12calculatePV=94,271.43PaymentaftertheendofYear3:N=324I/Y=(5.5/12)=0.45833PV=94,271.43FV=0calculatePMT=559.16Forplanningpurposes,anindividualwantstobeabletospend€80,000peryear,attheendofeachyear,forananticipated25yearsinretirement.Inordertofundthisretirementaccount,hewillmakeannualdepositsof€6,608attheendofeachofhisworkingyears.Whatistheminimumnumberofsuchdepositshewillneedtomaketofundhisdesiredretirement?Use6%interestcompoundedannuallyforallcalculations.firstcalculatetheneededfundsatretirement:N=25,I/Y=6,PMT=80,0