# Technology Introduced

## Calculator

#### Time Value of Money Buttons

1. The time value of money buttons are the five buttons located on the third row of your calculator.
Calculator Symbol Characteristic Data Entry Requirements
N The number of compounding periods An integer or decimal number; no negatives
I/Y The nominal interest rate per year Percent format without the % sign (i.e., 7% is just 7)
PV Present value or principal An integer or decimal number
PMT Used for annuity payment amounts (covered in Chapter 11) and is not applicable to lump-sum amounts; it needs to be set to zero for lump-sum calculations An integer or decimal number
FV Future value or maturity value An integer or decimal number

To enter any information into any one of these buttons or variables, called loading the calculator, key in the information first and then press the appropriate button.

1. The frequency function is logically placed above theĀ I/Y button and is labelled P/Y. This function addresses compound interest frequencies, such as the compounding frequency. Access the function by pressing 2nd P/Y to find the following entry fields, through which you can scroll using your arrow buttons.
Calculator Symbol Characteristic Data Entry Requirements
P/Y Annuity payments per year (payment frequency is introduced in Chapter 11); when working with lump-sum payments and not annuities, the calculator requires this variable to be set to match the C/Y A positive, nonzero number only
C/Y Compounds per year (compounding frequency) A positive, nonzero number only
• To enter any information into one of these fields, scroll to the field on your screen, key in the data, and press Enter.
• When you enter a value into the P/Y field, the calculator will automatically copy the value into the C/Y field for you. If in fact the C/Y is different, you can change the number manually.
• To exit the P/Y window, press 2nd Quit.

#### Keying in a Question

• You must load the calculator with six of the seven variables.
• To solve for the missing variable, press CPT followed by the variable.

#### Cash Flow Sign Convention

• The cash flow sign convention is used for the PV, PMT, and FV buttons.
• If money leaves you, you must enter it as a negative.
• If money comes at you, you must enter it as a positive.

#### Clearing the Memory

• Once you enter data into any of the time value buttons, it is permanently stored until one of the following happens:
• You override it by entering another piece of data and pressing the button.
• You clear the memory of the time value buttons by pressing 2nd CLR TVM (a step that is recommended before you proceed with a separate question).
• You press the reset button on the back of the calculator.

### Image Description

Figure 9.T: Picture of the BAII Plus calculator showing the Frequency Functions and the Time Value of Money Buttons. [Back to Figure 9.T]