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# .

learn

FINANCIAL
Calculator

## Overview of Calculator Operations

The .learn Financial Calculator is designed to resemble one of the most popular financial calculators BA II Plus by
Texas Instrument. Although its functionality is roughly similar to BA II, the layout and the key sequences for entering
values and calculations are different in many cases. The calculator can be used as the regular arithmetic calculator,
but its main intended purpose is to perform vast array of financial calculations. The most noticeable feature of .learn
Financial Calculator is the enhancement it provides for visualization of financial problems:

## Notation used in the manual

Whenever the key sequences are described, the key strokes are defined by bolded capital letters. For example,
2.5 I/Y means pushing number buttons [2], [.], [5], and button [I/Y].

## Entering numbers, performing operations, and assigning values to variables

The elementary arithmetic operations are performed as in most calculators: numbers and operation symbols are
entered in their natural order. For example to perform 2+3=5 you enter the sequence 2 + 3 = and look at the
display for result: 5.
Most time-value-of-money variables are assigned by entering the number value first and then the name of the
variable. For example, to assign 25000 to present value variable, you press: 25000 PV.
In certain cases (in amortization and cash flow modes, you assign the value to the variable shown on the display by
entering the number and then pressing ENTER.

## Clearing and Resetting

To clear the latest entry press C/CE.
To reset calculator to zero values press RESET.
The calculator would not understand any entry or correction performed by using mouse and computer keys.

Modes of Operation
The calculator works in three modes: TVM, Amortization Schedule, Cash Flow. The default mode is TVM.
To access a TVM variable, press a TVM key (N, I/Y, PV, PMT, FV).
To access the Amortization mode, press AMORT.
To access the Cash Flow mode, press CF.
The AMORT and CF are the toggle-buttons that turn red when a specific mode is turned on. Detailed description of
those modes follows.

Calculator Display
The calculator display consists of three parts; the original one-line display, the TVM Table display, and Time Line
display. By default, all three are shown when the calculator is started. The TVM Table and Time Line can be turned
on/off by using two check box buttons at the bottom of calculator. The content of the TVM Table display is different in
TVM, Amortization, and Cash Flow modes.

Time-Value-of-Money Mode

Use the Time-Value-of-Money (TVM) variables to solve problems with equal and regular cash flows that are either all
inflows or all outflows (for example, annuities, loans, mortgages, leases, and savings). For cash-flow problems with
unequal cash flows, use the Cash Flow mode.

TVM Variables

Variable
Number of periods
Interest rate per year
Present value
Payment
Future value
Number of payments per year
Number of compounding periods per year
End-of-period payments
Beginning-of-period payments

Key
N
I/Y
PV
PMT
FV
P/Y
C/Y
BGN (black)
BGN (red)

Display
N
I/Y
PV
PMT
FV
P/Y
C/Y

Type
of Variable
Enter-or-compute

Enter-or-compute

Enter-or-compute

Enter-or-compute

Enter-or-compute

Enter-only

Enter-only

Setting

Setting

## Using the TVM Variables

Because the calculator stores values assigned to the TVM variables until you clear or change them, you should not
have to perform all steps each time you work a problem.

To assign a value to a TVM variable, key in a number and press a TVM key (N, I/Y, PV, PMT, FV).
To change the number of payments, key in a number, and press P/Y. To change the compounding periods, key in a
number, and press C/Y.
To change the payment period (end of period / beginning of period), press BGN
when its
black (not active) its end of period, when its red (active) its beginning of period.
To compute a value for the unknown variable, press CPT, and then press the key for the unknown variable.

## Clearing the Unused Variable

For problems using only four of the five TVM variables, enter a value of zero for the unused variable.
For example, to determine the present value (PV) of a known future value (FV) with a known interest rate (I/Y) and no
payments, enter 0 and press PMT.

## Entering Positive and Negative Values for Outflows and Inflows

Enter negative values for outflows (cash paid out) and positive values for inflows (cash received).
Note: To enter a negative value, press +/- after entering the number. To change a negative value to positive, press
+/-.

## Entering Values for I/Y, P/Y, and C/Y

Enter I/Y as the nominal interest rate. The calculator automatically converts I/Y to a per period rate based on the
values of P/Y and C/Y.
Entering a value for P/Y automatically enters the same value for C/Y. (You can change C/Y later.)

## Specifying Payments Due With Annuities

Use Period begin/end (key BGN) to specify whether the transaction is an ordinary annuity or an annuity due.
Set END for ordinary annuities, in which payments occur at the end of each payment period. (This category includes
most loans.)
Set BGN for annuities due, in which payments occur at the beginning of each payment period. (This category
includes most leases.)

## Entering, Recalling, and Computing TVM Values

To enter a TVM value, key in the value and store it by pressing a TVM key (N, I/Y, PV, PMT, or FV).
To display a stored TVM value, press RCL and a TVM key.
To compute a TVM value, press CPT and a TVM key in standard-calculator mode

## Using xP/Y to Calculate a Value for N

1. Key in the number of years, and then press xP/Y to multiply by the stored P/Y value. The total number of
payments appears.
2. To assign the displayed value to N for a TVM calculation, press N.

## Entering Cash Inflows and Outflows

The calculator treats cash received (inflows) as a positive value and cash invested (outflows) as a negative value.
You must enter cash inflows as positive values and cash outflows as negative values.
The calculator displays computed inflows as positive values and computed outflows as negative values.

## Example: Computing Basic Loan Interest

If you make a monthly payment of \$632.07 on a 30-year mortgage for \$100,000, what is the interest rate on your
mortgage?
To
Press
Display
12 P/Y
P/Y= 12.00
Set payments per year to 12
N= 360.00
30 xP/Y N
Enter number of payments using the payment
multiplier
PV= 100,000.00
100000 PV
Enter loan amount
PMT= -632.07
632.07 +/- PMT
Enter payment amount
I/Y= 6.50
CPT I/Y
Compute interest rate
Answer: The interest rate is 6.5% per year.
Table view
Time line view

## Example: Computing Number of Periods

You open a savings account and make a deposit of \$500,000. The interest rate is 14% annual compounding.
How long will it take to reach \$2,000,000 in your saving account?
To
Press
Display
RESET
0.00
Set all variables to default
PV = - 500,000
500000 +/- PV
Enter present value
FV = 2,000,000
2000000 FV
Enter future value
I/Y = 14
14 I/Y
Enter interest rate
N = 10.5801
CPT N
Compute number of periods
Answer: The number of periods is 10.5801.
Table view
Time line view

## Examples: Computing Basic Loan Payments

These examples show you how to compute basic loan payments on a \$100,000 mortgage at 6.5% for 30 years.
Note: After you complete the first example, you should not have to reenter the values for loan amount and interest
rate. The calculator saves the values you enter for later use.

## Computing Monthly Payments

To
Set payments per year to 12
Enter number of payments using the payment
multiplier
Compute interest rate
Enter loan amount
Compute payment
Answer: The monthly payments are \$632.07.
Table view

Press

Display

12 P/Y

30 xP/Y N

P/Y= 12.00
N= 360.00

6.5 I/Y
100000 PV
CPT PMT

I/Y= 6.50
PV= 100,000.00
PMT= -632.07

## Computing Quarterly Payments

Note: The calculator automatically sets the number of compounding periods (C/Y) to equal the number of payment
periods (P/Y).
To
Press
Display
4 P/Y
P/Y= 4.00
Set payments per year to 4
N= 120.00
30 xP/Y N
Enter number of payments using the payment
multiplier
PMT= -1,899.52
CPT PMT
Compute payment
Answer: The quarterly payments are \$1,899.52
Time line view
Table view

## Examples: Computing Value in Savings

These examples show you how to compute the future and present values of a savings account paying 1.5%
compounded at the end of each year with a 20-year time frame.

## Computing Future Value

Example: If you open the account with \$10,000, how much will you have after 20 years?
To
Press
RESET
Set all variables to default
20 N
Enter number of payments
1.5 I/Y
Enter interest rate
10000 +/- PV
Enter beginning balance
CPT FV
Compute future value
Answer: The account will be worth \$13,468.55 after 20 years.
Table view

Display
0.00
N= 20.00
I/Y= 1.50
PV= -10,000.00
FV= 13,468.55

## Computing Present Value

Example: How much money must you deposit to have \$100,000 in 20 years?
To
Press
Display
100000 FV
FV= 100,000.00
Enter final balance
PV= -74,247.04
CPT PV
Compute present value
Answer: You must deposit \$74,247.04
Table view
Time line view

## Example: Computing Present Value in Annuities

The Foxcity company purchased equipment providing an annual savings of \$20,000 over 10 years. Assuming an
annual discount rate of 12%, what is the present value of the savings using an ordinary annuity and an annuity due?

I/Y=12

I/Y=12

To
Press
Display
RESET
0.00
Set all variables to default
N= 10.00
10 N
Enter number of payments
I/Y= 12.00
12 I/Y
Enter interest rate
PMT= -20,000.00
20000 +/- PMT
Enter payment
PV= 113,004.46
CPT PV
Compute present value (ordinary annuity)
Answer: The present value of the savings is \$113,004.46 with an ordinary annuity.
Table view
Time line view

To
Press
Display
BGN
Set beginning-of-period payments
PV= 126,565.00
CPT PV
Compute present value (annuity due)
Answer: The present value of the savings is \$126,565.00 with an annuity due.
Time line view
Table view

## Example: Computing Present Value of a Lease with Residual Value

The Hobocus Company wants to purchase a machine currently leased from your company. You offer to sell it for the
present value of the lease discounted at an annual interest rate of 20% compounded monthly. The machine has a
residual value of \$8000 with 36 monthly payments of \$1500 remaining on the lease. If the payments are due at the
beginning of each month, how much should you charge for the machine?
To
Press
Display
RESET
0.00
Set all variables to default
BGN
Set beginning-of-period payments
N= 36.00
36 N
Enter number of payments
IY= 1.67
20 / 12 = I/Y
Calculate and enter periodic interest rate
FV= -8,000.00
8000 +/- FV
Enter residual value of asset
PMT= -1,500
1500 +/- PMT
Enter lease payment amount
PV= 45,447.05
CPT PV
Compute present value of lease payment
Answer: Hobocus should pay your company \$45,447.05 for the machine
Table view
Time line view

## Example: Computing Other Monthly Payments

If you finance the purchase of a new desk and chair for \$525 at 15% APR compounded monthly for two years, how
much is the monthly payment?

To
Set all variables to default
Set payments per year to 12
Enter number of payments using payment
multiplier
Enter interest rate
Enter loan amount
Compute payment
Answer: Your monthly payment is \$25.46.
Table view

Press

Display

RESET

12 P/Y
2 xP/Y N

0.00
P/Y= 12.00
N= 24.00

15 I/Y
525 PV
CPT PMT

I/Y= 15,00
PV= 525.00
PMT= -25.46

## Time line view

Amortization Mode
The Amortization mode is used after solving a TVM problem to generate an amortization schedule.

Amortization Variables
Variable
Starting payment
Ending payment
Balance
Principal paid
Interest paid

Key
AMORT

Display
P1
P2
BAL
PRN
INT

Type of Variable
Enter-only
Enter-only
Auto-compute
Auto-compute
Auto-compute

## Generating an Amortization Schedule

The Amortization mode uses TVM values to compute an amortization schedule.
1. Press AMORT. The current P1 value appears.
2. To specify the first in a range of payments, key in a value for P1 and press ENTER.
3. Press . The current P2 value appears.
4. To specify the last payment in the range, key in a value for P2 and press ENTER.
5. Press to display each of the automatically computed values:
BAL the remaining balance after payment P2
PRN the principal
INT the interest paid over the specified range
6. Press AMORT, or, if INT is displayed, press to display P1 again.
7. To generate the amortization schedule, repeat steps 2 through 5 for each range of payments.

## Using the Amortization Table

Alternatively, you can use the enhanced display option of the calculator. In the AMORT table the scrollable minispreadsheet displays the complete information about the amortization schedule. The spreadsheet appears
immediately after pressing AMORT. The data are organized in columns: Period, Balance, Principal, and Interest.
Each row shows the loan balance at that period as well as principal and interest paid from the loan initiation to the
current period. You can scroll the spreadsheet to lookup for any period. For convenience of comparing, you can
highlight two different rows by positioning mouse and clicking on first row, and then moving mouse to another row.

## Example: Computing Mortgage Payments and Generating an Amortization

Schedule
This example shows you how to use the TVM and Amortization modes to calculate the monthly payments on a 30year loan starting in May and generate an amortization schedule for the first three years of the loan.

## Computing Mortgage Payments

Calculate the monthly payment with a loan amount of \$150,000 and 7.000% APR.
To
Press
Display
RESET
0.00
Set all variables to default
P/Y= 12.00
12 P/Y
Set payments per year to 12
N= 360.00
30 xP/Y N
Enter number of payments using payment
multiplier
I/Y= 7.00
7 I/Y
Enter interest rate
PV=150,000.00
150000 PV
Enter loan amount
PMT= -997.95
CPT PMT
Compute payment
Answer: The computed monthly payment, or outflow, is \$997.95.
Time line view
Table view

## Generating an Amortization Schedule

Generate an amortization schedule for the first three years of the loan. If the first payment is in May, the first year has
eight payment periods. (Following years have twelve payment periods each.)
To
Press
Display
AMORT
P1= 1
Select the Amortization worksheet
P2= 8.00
Set ending period to 8
8 ENTER
BAL= 148,996.05
Display 1st year amortization data

## Change beginning period to 9

Change ending period to 20
Display 2nd year amortization data

## Change beginning period to 21

Change ending period to 32
Display 3rd year amortization data

PRN= -1003.95
INT= -6,979.68

9 ENTER
20 ENTER

P1= 9.00
P2= 20.00
BAL= 147,399.76
PRN= -1,596.29
INT= -10,379.15

21 ENTER
32 ENTER

P1= 21.00
P1= 32.00
BAL= 145,688.08
PRN= -1,711.69
INT= -10,263.76

Continue in similar fashion to calculate the balance, interest and principal paid for any other period of interest.
Alternatively, you can lookup for the same data in the amortization table. The screenshot below shows six first and
last rows of the table.
First 6 rows of amortization table
Last 6 rows of amortization table

## Example: Computing Payment, Interest, and Loan

Balance After a Specified Payment
A group of sellers considers financing the sale price of a property for \$200,000 at 6% annual interest, amortized over
a 30-year term with a balloon payment due after five years. They want to know:
Amount of the monthly payment
Amount of interest they will receive
Remaining balance at the end of the term (balloon payment)
Computing the Monthly Payment
To
Press
Display
RESET
0.00
Set all variables to default
P/Y= 12.00
12 P/Y
Set payments per year to 12
N= 360.00
30 xP/Y N
Enter number of payments using payment
multiplier
I/Y= 6.00
6 I/Y
Enter interest rate
PV=200,000.00
200000 PV
Enter loan amount
PMT= -1199.10
CPT PMT
Compute payment

## Generating an Amortization Schedule for Interest and Balloon Payment

To
Select the Amortization worksheet
Enter end period (five years)
View balance due after five years (balloon
payment)
View interest paid after five years

Press

Display

AMORT

5 xP/Y ENTER

P1= 1
P2= 60.00
BAL= 186,108.71

INT= -58,054.78

## If the sellers financed the sale, they would receive:

Monthly payment: \$1199.10 for five years
Interest: \$58,054.78 over the five years
Balloon payment: \$186,108.71
Alternatively, you can lookup for the same data in the amortization table:
Amortization table

## Cash Flow Mode

Use the Cash Flow mode to solve problems with unequal cash flows.
To solve problems with equal cash flows, use the TVM mode.
To access the Cash Flow mode and initial cash flow value (CFo), press CF.
To access the cash flow amount and frequency variables (Cnn/Fnn), press or
To enter the discount rate variable (I), type the number and press I/Y.
To compute net present value (NPV), press CPT and NPV.
To compute the internal rate of return (IRR), press CPT and IRR.

## Cash Flow Variables

Variable
Key
CF
Initial cash flow
Amount of nth cash flow

## Frequency of nth cash flow

I/Y
Discount rate
NPV
Net present value
IRR
Internal rate of return
* nn represents the cash flow or frequency number.

Display
CFo
Cnn *
Fnn *
I/Y
NPV
IRR

Type of Variable
Enter-only
Enter-only
Enter-only
Enter-recall
Compute-recall
Compute-recall

## Uneven and Grouped Cash Flows

Uneven Cash Flows
The Cash Flow mode analyzes unequal cash flows over equal time periods. Cash-flow values can include both
inflows (cash received) and outflows (cash paid out). Enter positive values for cash inflows (cash received) and
negative values for cash outflows (cash paid out). To enter a negative value, key in a number and press +/-.

All cash-flow problems start with an initial cash flow labeled CFo. CFo is always a known, entered value.

## Grouped Cash Flows

Cash-flow problems can contain cash flows with unique values as well as consecutive cash flows of equal value.
Although you must enter unequal cash flows separately, you can enter groups of consecutive, equal cash flows
simultaneously using the Fnn variable.

## Entering Cash Flows

Cash flows consist of an initial cash flow (CFo) and additional cash flows (C01, C02, ), each of which can have a
unique value. You must enter the number of occurrences (up to 9,999), or frequency (F), for each additional cash
flow.
The calculator displays positive values for inflows (cash received) and negative values for outflows (cash paid out).
To clear the Cash Flow worksheet, press RESET.
To enter cash flows:
1. Press CF. The initial cash-flow value (CFo) appears.
2. Key in a value for CFo and press ENTER.
3. To select an additional cash-flow variable, press . The C01 value appears.
4. To change C01, key in a value and press ENTER.
5. To select the cash-flow frequency variable (F01), press . The F01 value appears.
6. To change F01, key in a value and press ENTER.
7. To select an additional cash-flow variable, press . The C02 value appears.
8. Repeat steps 4 through 7 for all remaining cash flows and frequencies.
9. To review entries, press or

## Computing Cash Flows

The calculator solves for these cash-flow values:
Net present value (NPV) is the total present value of all cash flows, including inflows (cash received) and outflows
(cash paid out). A positive NPV value indicates a profitable investment.
Internal rate of return (IRR) is the interest rate at which the net present value of the cash flows is equal to 0.

## Example: Solving for Unequal Cash Flows

These examples show you how to enter and edit unequal cash-flow data to calculate:
Net present value (NPV)
Internal rate of return (IRR)
A company pays \$10,000 for a new machine, plans a 20% annual return on the investment, and expects these
annual cash flows over the next six years:
Year
Cash Flow Number
Cash Flow Estimate
Purchase
CFo
-\$10,000
1
C01
2,000
2
5,000
C02
3-6
6,000 every year
C03
As the table shows, the cash flows are a combination of equal and unequal values. As an outflow, the initial cash flow
(CFo) appears as a negative value.

## Entering and Computing Cash-Flow Data

To
Select Cash Flow mode
Enter initial cash flow
Enter cash flow for first year
Enter cash flow for second year
Enter cash flows for years three through six
Enter interest rate per period
Compute net present value
Compute internal rate of return

Press

Display

CF

CFo= 0
CF0= -10000
C01= 2,000.00
F01= 1.00
C02= 5,000.00
F02= 1.00
C03= 6,000.00
F03= 4.00
I= 20.00
NPV= 5,925.28
IRR= 38.35

## 10000 +/- ENTER

2000 ENTER

5000 ENTER

6000 ENTER
4 ENTER
20 I/Y
CPT NPV
CPT IRR

Alternatively, you can lookup the data in the Cash Flow Table display. The table comes up immediately after you
press CF, and displays the cash flow for every time period as well as Interest, IRR and NPV.
First 6 rows of cash flow table
Last 6 rows of cash flow table

## Example: Value of a Lease with Uneven Payments

A lease with an uneven payment schedule usually accommodates seasonal or other anticipated fluctuations in the
lessees cash position. A 36-month lease has the following payment schedule payments:
Number of months
Payment amount
3
\$0
6
\$6,000
4
\$0
10
\$7,000
3
\$0
10
\$7,500
If the required earnings rate is 10% per 12-month period with monthly compounding:
What is the present value of these lease payments?
What even payment amount at the beginning of each month would result in the same present value?
Because the cash flows are uneven, use the Cash Flow mode to determine the net present value of the lease.

Computing NPV
The cash flows for the first three months are stated as a group of three \$0 cash flows. Because the lease specifies
beginning-of-period payments, you must treat the first cash flow in this group as the initial investment (CFo) and enter
the remaining two cash flows on the cash flow screens (C01 and F01).
To
Press
Display
RESET
0.00
Set all variables to defaults
CF
CFo= 0
Select Cash Flow mode
CFo= 0.00
ENTER
Enter initial cash flow
C01= 0.00
ENTER
Enter first group of cash flows
F01= 2.00
2 ENTER
C02= -6,000.00
6000 +/- ENTER
Enter second group of cash flows
F02= 6.00
6 ENTER
C03= 0.00
ENTER
Enter third group of cash flows
F03= 4.00
4 ENTER
C04= -7,000.00
7000 +/- ENTER
Enter 4th group of cash flows
F04= 10.00
10 ENTER
C05= 0.00
ENTER
Enter 5th group of cash flows
F05= 3.00
3 ENTER
C06= -75000.00
7500 +/- ENTER
Enter 6th group of cash flows
F06= 10.00
10 ENTER
I= 0.83
10 / 12 = I/Y
Enter interest rate per period
NPV= -153,197.15
CPT NPV
Compute net present value
As you enter the cash flows for different periods, you can check the correctness of your input by scrolling the cash
flow table and reviewing the data:
First 6 rows of cash flow table
Last 6 rows of cash flow table