3h Baii Plus Guide Ebookfsdddddddddd

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3H BAII Plus Guide (ebook)
Personal Finance (Mount Royal University)
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CFA® exam guide to the
Texas Instruments
BA II Plus Calculator

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Copyright © 300 Hours 2016

3rd Floor
120 Moorgate
London EC2M 6UR
United Kingdom
www.300hours.com
All rights reserved. Without limiting the rights under copyright reserved above, no
part of this publication may be reproduced, stored or introduced into a retrieval
system, or transmitted, in any form or by any means (electronic, mechanical,
photocopying, recording or otherwise), without the prior written permission of the
copyright owner of this book.
While care has been taken to ensure the accuracy of the contents of this guide, it is
intended as guidance only and does not constitute definitive advice. The information
in this guide is based on the authors’ experience and knowledge on the BA II Plus
calculator models and CFA exams at the time of publication, all of which are subject
to change. 300 Hours cannot accept any legal liability from readers acting on the
information given.
CFA Institute does not endorse, promote, or warrant the accuracy or quality of the
products or services offered by 300 Hours. CFA Institute, CFA®, and Chartered
Financial Analyst® are trademarks owned by CFA Institute.

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Contents
Introduction 5
Setting Up 7
CFA Exam Approved Calculators 8
Calculator Batteries: Rated Life & Replacements 10
Setting Up and Fine-tuning Your BA II Plus Calculator 12
The Basics 15
The Simple Stuff 16
Becoming a Master of Memory with STO and RCL 20
Data Clearing 23
Additional Secret Tips 25
Topic Specific Functions 29
Discounted Cash Flow 30
Permutations & Combinations 40
Effective & Nominal Yield 41
Depreciation (DEPR mode) 43
Statistical Functions 47
Additional Stuff 49

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Introduction

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This guide teaches you how to use your calculator like a

CFA veteran.
The purpose of this guide is to show you the ways the Texas
Instruments BA II Plus calculator can be used in the context of the
CFA program and exams. It doesn’t cover every possible feature in
your calculator – that’s what the manufacturer’s manual is for!
Focusing on every function available to your calculator will simply

be replicating the guidebook included with your calculator, and
doesn’t save you your most precious commodity: your time.
Throughout this guide, we’ll highlight contextual points using the

ATTENTION and TIP boxes:
Advice that may help you avoid accidents, calculation

errors, or other unwanted results.
Attention
An extra tip to help you make the most of the discussed

technique or method.
Tip
Now let’s get you whizzing along with your BA II Plus calculator.
Ready? Let’s go!

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Setting Up

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CFA Exam Approved Calculators

There are only 2 main calculator types approved for the CFA
exam, the Texas Instruments BAII Plus and the Hewlett Packard
12C.
However, within these two main types, there are several

variations and versions. We list most of the variations here.
Texas Instruments BA II Plus (including BA II Plus Professional)
The Texas Instruments BA II Plus has a Professional version,

which is also allowed. There are also several versions across the
BAII Plus and BA II Plus Professional: they are all approved for
use, and are almost identical in functionality.
If you need to borrow a calculator during the exam, any of these

calculators should adequately replace your own BA II Plus!
BA II Plus BA II Plus Pro BA II Plus BA II Plus Pro

(older version) (older version) (new version) (new version)

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Hewlett Packard 12C
The HP 12C also have several versions, which are all approved,
including:
● HP 12C Platinum (including 25th anniversary edition)
● HP 12C 30th anniversary edition
● HP 12C Prestige
The HP 12C uses Reverse Polish Notation, which can make it

radically different to use compared to the BA II Plus.
Below are some examples of how they look like:
HP 12C HP 12C Platinum

(including 25th anniversary
edition)
HP 12C 30th anniversary HP 12C Prestige

edition

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Calculator Batteries:
Rated Life & Replacements
The BA II Plus uses a CR2032 lithium battery, which is commonly
used in many small electronic devices. This type can typically last
up to 1,500 hours with normal usage frequency, and if new,
typically you shouldn’t need to replace it over the entire course of
the CFA program.
When it does eventually run out, you can follow these simple steps
to replace the battery. You may find them useful if you want to
replace your battery before the big test!
How to Replace the Batteries in the TI BA II Plus calculator
1. Turn off the calculator.
2. Remove the four screws from the back cover with a small
Phillips screwdriver, and carefully remove the back cover.
3. Using the screwdriver, remove the screws from the metal

battery cover and remove the cover.
4. Tip the calculator slightly to remove the old battery,

avoiding touching any other calculator components.
5. Install the new battery with the positive sign (+) sign
facing into the calculator (not showing).
6. Reattach the battery cover and its screws.
7. Align the screw holes in the back cover with those in the
calculator, then snap the back cover onto the calculator.
Replace the screws.
Ensure you install the correct battery type to avoid

accidents. You can find the battery type (CR2032)
labelled clearly on their packaging.
Attention
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Replacing the battery will reset your calculator (i.e.

any stored data will be erased)!
Attention
If you prefer, you’ll also be able to bring a small screwdriver and

spare batteries to the CFA exams to be able to change them in the
test.
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Setting Up and Fine-tuning Your BA

II Plus Calculator
To optimize your calculator for the CFA exams, we recommend
going through these 4 steps below. Steps 2, 3 and 4 are
recommended options, however we do strongly advise that you
follow them, as it will save you a lot of time and minimize risk of
miscalculations in the exam.
In this manual, when a sequence of keys calls a

secondary function, the function name will be shown
like this: FORMAT. For example, FORMAT: 2ND .
Tip
Step 1: Understand the 2ND key
Most buttons on your calculator has a primary function, shown on

the button itself, e.g. 2ND on the upper left corner of the keypad.
Pressing 2ND before pressing another key accesses their

secondary functions, listed above each key, e.g. the secondary
function for CPT is QUIT.
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Step 2: Set a floating number of decimal places
For calculation results that are in decimals, you’ll want your

calculator to show you the maximum number of decimals without
rounding it off for you. The BAII Plus calculator has a ‘floating
decimal’ function which you can activate using the instructions
below.
● Enter FORMAT mode: 2ND .
● Select DEC = 9 to set the floating decimal function: 9
CPT
● Quit FORMAT mode: 2ND CPT
The floating decimal function will always show you the maximum
number of decimal places, while not showing a long trail of zeros
for round numbers.
Step 3: Change to the Algebraic Operating System (AOS) mode
The BA II Plus by default performs calculations in the order that

you input them (i.e. what the calculator calls Chain mode or Chn).
However, we recommend that you change this to the Algebraic
Operating System (AOS), which performs calculations according to
the correct mathematical priority.
In AOS mode, this means that when you calculate 1 + 2 x 3, it will

show 7. The chain method (Chn) however, will show 9.
● Enter FORMAT mode: 2ND .
● Select calculation mode by scrolling down four times:

â â â â
● If the calculator displays Chn, select AOS mode: 2ND
ENTER
● Exit FORMAT mode: 2ND CPT
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Step 4: Tweak the Time Value of Money (TVM) calculation

defaults
Check that this setting is right for most calculations you need for
CFA. Set "P/Y", i.e period per year = 1.
● Enter P/Y mode: 2ND I/Y
● Set P/Y to 1: 1 ENTER
The RESET function: 2ND +|- ENTER will reset all
your settings back to factory settings. If you feel that

you’ve accidentally altered your calculator’s presets in a
way that could be detrimental, simply press 2ND
+|- ENTER to reinstate the factory defaults.
Tip
Be sure to then follow Step 1-4 above to reconfigure
your calculator for CFA exams.
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The Basics
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The Simple Stuff

Most of the content in this section should be familiar to you, unless
it’s your first time with a calculator of any kind. However, do have
a quick look through - we include some examples and additional
tips that you may not have known about.
Addition and Subtraction – examples
Operation Keys to Press Result
1+2 1 + 2 = 3
5-1 5 - 1 = 4
Multiplication and Division – examples
1x2 1 × 2 = 2
8÷2 8 ÷ 2 = 4
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Using Negative Numbers
When you’ve entered a number into your calculator, you can use
the +|- key to toggle the negative value of the number. Pressing
the +|- key again switches the negative value back to its
positive value. A couple of examples below:
1 + (-2) 1 + 2 +|- = -1
(-6) x 8 6 +|- + 8 = -48
Parentheses
The parentheses buttons, ( and ) , are quite helpful,

ensuring that the computation is done in the preferred order and
logical way. For example, if you needed to calculate the following:
!. !"/(!. !" − !. !")
!. !"!
You can use the parentheses buttons to perform this calculation:

1.31 ÷ ( 1.12 - 0.06 ) ÷ 1.12 x2 =
Note that enclosing an entire calculation with parentheses will

make the calculator compute the result of the calculation
automatically as soon as ) is pressed.
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Reciprocals
When you’ve entered a number into your calculator, you can use
the 1/x key to toggle to the reciprocal of that number (i.e. 1
divided by the number). Pressing the 1/x key again switches
the reciprocal back to the original number.
Note that 1/x applies itself automatically to the previous entry

only. Therefore, it’s not necessary to press the = key to obtain
the reciprocal of the current entry.
Examples below:
1÷4 4 1/x 0.25
( 4 + 6 ) 1/x
1
or 0.1
4 + 6
4 + 6 = 1/x
Powers
43 4 yx 3 = 64
4-2 4 yx 2 +|- = 0.0625
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Roots
Obtaining the square root of a number is simple, as shown below.

Note that √x , like 1/x , applies itself automatically to the
previous entry only.
However, to obtain higher roots, you’ll need to use the yx
button. For example, 3√64 = 641/3, so 64 yx 3 1/x =
gives the required result, 4.
√9 9 √x 3
3√64 64 yx 3 1/x = 4
Natural logarithm and natural exponential
e2 2 2ND LN 7.389
ln 2 2 LN 0.6931
Note that LN and 2ND LN , like 1/x , apply themselves

automatically to the previous entry only.
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Becoming a Master of Memory with

and
STO RCL
Your BA II Plus calculator comes with 10 memory slots that will

be very handy during the exam. These act as temporary slots for
you to store calculations in for future use. E.g. if you’ve just
calculated an exchange rate that you’d like to use later in a
forward swap calculation, you can store it in one memory slot that
you can recall later.
Storing STO and recalling RCL numbers in the calculator's

memory speeds things up significantly. To store the number on
your calculator screen, press STO then for example 1 to assign
it to slot 1. To recall that same number, press RCL 1 . You can
use the digits 0 through 9 for this purpose.
Example: STO and RCL
Let’s say you need to calculate the following:

! !. ! !. !"/(!. !" − !. !")
+ +
!. !" !. !"! !. !"!
You could use STO and RCL to perform this calculation by first
!
calculating and storing the first term ( ):
!.!"
1 ÷ 1.12 = STO 1
This stores the first term in slot 1. You can then calculate and
!.!
store the second term ( ):
!.!"!
1.1 ÷ 1.12 x2 = STO 2
This stores the second term in slot 2. You can then calculate the
!.!"/(!.!"!!.!")
third term ( ), and bring them all together by recalling
!.!"!
the previous 2 terms with the RCL button:
1.31 ÷ ( 1.12 - 0.06 ) ÷ 1.12 x2 + RCL 1
+ RCL 2 =
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STO and RCL are extremely useful tools - make

sure you master them and use them frequently in your
calculations.
Tip
You can access the memory and see what numbers you
have stored using MEM: 2ND 0 and toggle up á
or down â .
Tip
Modifying stored data
You can also modify the memory with memory arithmetic using
the current displayed number. For example, if the displayed
number is 4 and you wanted to add this to the number in memory
slot 1, simply enter STO + 1 . You can also do this for all of
the other elementary arithmetic operations - , × and ÷ .
To raise the value stored in memory 5 to the power of the

displayed value, use STO yx 5 . (That is, y represents the
value stored in memory and x represents the displayed value.)
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How to clear stored memory
To clear all 10 stored memory slots, you can use MEM followed by
CLR WORK. This is done with the key sequence 2ND 0 2ND
CE|C .
To clear a single memory slot you can store 0 in it, but this is
likely to be unnecessary as storing a new number overwrites the
previously stored number.
MEM followed by CLR WORK clears the TVM worksheet. This is

done with the key sequence 2ND 0 2ND FV .
CLR WORK by itself clears all worksheets except TVM worksheets

(e.g. CF values). This is done with the key sequence 2ND CE|C .
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Data Clearing
The CE|C key
CE stands for Clear Entry. It’s meant to clear the current entry
that you’ve entered, without clearing the whole calculation that
you’ve done so far. Say you’ve done a string of multiplications, and
on the third one you make an error. You wanted to enter 158.32 in
the last entry, but forgot to enter your decimal as shown below:
623.32 × 2313.32 × 15832
Starting over would be a pain - this is where CE comes in. Pressing

the CE|C key once only clears the last entry (15832), so that you
can correct your erroneous entry.
623.32 x 2313.32 x 15832 CE|C 158.32 =
Pressing the CE|C key twice performs C (Global Clear), which

clears everything if you’d like to start again. Using the same
example, to correct the same mistake, the entries would look like
this:
623.32 × 2313.32 × 15832 CE|C CE|C
at this point, all entries are cleared...
623.32 × 2313.32 × 15832 =

…leaving you free to start again.
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The à key
If you’d like to clear one digit at a time from the current entry
(similar to the backspace key on your computer), press the à
key.
This is a useful delete button: especially when you make a mistake

in the middle of typing out a long equation. For example, pressing
2 × 3 à 2 = will give you 4, as you have reversed
the mistake of pressing 3 without the need to restart the whole

operation. You have better control and can delete by
character/numbers, rather than clearing the whole previous entry
like the next function below.
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Additional Secret Tips
The K function
Do you ever find that you need to perform an operation repeatedly,

say, multiplying a set of numbers by a factor of 3? The K function
provides an easy way to do this.
For example, if you want to multiply 22, 55 and 99 by 3, start with

22 × 3 . Then press K: 2ND % followed by = . This
will give you your result of 66.
Now after this, the calculator has stored the × 3 operation.

You can simply enter 55 = and this will give you the required
result of 165. 99 = will give you 297.
You can even add a percentage of a number to itself.

100 + 50 % 2ND % = adds 50% to 100, after which
you can type any number followed by = to add 50% to it

(equivalent to multiplying the number by 1.5).
Note that after you perform a different calculation, the stored

operation will be erased and you’ll have to repeat the first step
again to store your operation.
The ANS function
If you wanted to use the result of the latest calculation in your

next calculation, but didn’t want to store the value in the
calculator memory, you can use ANS: 2ND = .
For example, if you wanted to calculate 4!!! :
6 - 3 =
…giving a result of 3…
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4 yx 2ND = =
…giving the required result of 64.
If you think you will need a value in calculations

down the road, it’s still best to use STO rather
than ANS to store it to memory!
Tip
Calculation examples and practice
Try these calculations to practise your newfound BA II Plus skills!

There are usually multiple ways to achieve the same calculation,
so play around until you feel confident and comfortable performing
any sort of mathematical calculation.
Question 1
! !.!"
Calculate: !" ! + +
!.!! !.!!.!
Solution: 8.9269
One possible method:

5 LN STO 1
2.2 yx 2 +|- = STO 2
9.85 ÷ 5.1 yx 0.2 + RCL 1 + RCL 2
Or:
5 LN STO 1
2.2 x2 1/x STO 2
9.85 ÷ 5.1 yx 0.2 + RCL 1 + RCL 2
Or:
5 LN STO 1
1 ÷ 2.2 x2 = STO 2
9.85 ÷ 5.1 yx 0.2 + RCL 1 + RCL 2
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Question 2
!.!" !.!
Calculate:
!.! × (!.!"# ! !".!")
Solution: 0.53782
There are many combinations possible – here’s one of them:

9.85 ÷ ( 5.1 × ( 2.132 + 40.79 ) ) =
yx 0.2 =
Question 3
Calculate the powers of 5 until 56. What are the 4th, 5th and
7th roots of 56 ?
Solution:
Using the K function simplifies the former part of the question,

while the latter can be addressed by storing memory.
Operation Keys to Press On-screen Result
Enter in K function
1 × 5 2ND % 5
for x5
Calculate 51 = 5
Calculate 52 = 25
Calculate 53 = 125
Calculate 54 = 625
Calculate 55 = 3,125
Calculate 56 = 15,625
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Store 56 to memory STO 1 15,625
Calculate the 4th RCL 1 yx 4

11.180…
root of 56 1/x =

6.898…
root of 56 1/x =

3.972…
root of 56 1/x =
The 4th, 5th and 7th roots can also be simply

calculated without any additional functions. For
example:
Tip The 4th root of 56 is 5(6/4). Entering 5 yx (
6 ÷ 7 ) = results in the answer, 11.18.
Answer:
The powers of 5 are 5, 25, 125, 625, 3125, and 15625.
The 4th, 5th and 7th roots of 56 are 11.18, 6.899, and 3.973.
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Topic Specific Functions
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Before learning these calculator methods, make sure

you understand the mathematical theory behind them
first!
Attention The BA II Plus calculator is a useful tool, but it’s no

substitute for understanding the concepts behind them.
Discounted Cash Flows
Choosing when the payment is made with BGN and END
BGN: 2ND PMT displays the setting of when the payment is

made. BGN indicates payments made at the beginning of a period
(as for an annuity due) and END indicates payments made at the
end of a period (as for an ordinary annuity).
To switch between BGN and END, enter BGN mode: 2ND PMT
then press SET: 2ND ENTER

To exit TVM mode, press QUIT: 2ND CPT
It’s best to leave the calculator in END mode and

change it to BGN when necessary.
Tip
Time Value of Money (TVM) worksheet
You can use the TVM worksheet when cash flows are equal, evenly
spaced and have a finite duration. This includes straight bonds
and annuities.
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N I/Y PV PMT FV
There are 5 pieces of information related to cash flows in the TVM

worksheet: number of time periods: N , interest rate per year:
I/Y , present value: PV , periodic payment: PMT , and future
value: FV . If three or four of the above are entered into the
calculator, the calculator will compute the others.
Example:
Calculate the future value of an (ordinary) annuity of $800 to be

received at the end of the next five years at an interest rate of 8%.
Solution:
Operation Keys to Press On-screen Result
Clear TVM
CLR TVM: 2ND FV No change
worksheet
Enter payments,
800 PMT PMT = 800
PMT
Enter time periods,

5 N N=5
N
Enter interest rate

8 I/Y I/Y = 8
in %, I/Y
Compute CPT the

CPT FV FV = -4,693
future value FV
You should make it a habit to always clear the

TVM worksheet before starting any new
calculation.
Tip
CLR TVM: 2ND FV
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If a present value or future value problem calls for

a number of payments per year that is different
from once a year (e.g. semi-annual payments,
monthly payments), the easiest calculation method
is to modify your entries for PMT , I/Y and
N according to the rules in the table below.
Fn Semi annual Quarterly Monthly
PMT Annual PMT Annual PMT Annual PMT

2 4 12
I/Y Annual I/Y Annual I/Y Annual I/Y

2 4 12
Tip
N (# of yrs) x 2 (# of yrs) x 4 (# of yrs) x 12
These rules only work if P/Y is set to 1, which you

should have done in Step 4 of the Setting Up
section (refer to page xx).
Avoid setting P/Y to anything other than 1 –

candidates often forget to set P/Y back to 1 after
they’ve finished, which leads to errors in future
calculations.
Cash Flow Worksheet
You can use the cash flow (CF) worksheet for net present value
(NPV) and internal rate of return (IRR) calculations where cash
flows are uneven and of a finite duration. It can also be used to
calculate Net Future Value (NFV), Payback Period (PB) and
Discounted Payback Period (DPB).
Like in the TVM worksheet, you can specify pieces of data - cash
inflows and outflows of an investment over time - and calculate the
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present value, NPV and IRR.
The keys you’ll be using for this worksheet are the following from
the first two rows of the calculator:
ENTER á â
CF NPV IRR
Cash Flow Worksheet Example
Let’s do an example:
For the given cash flow series below, calculate:
1. The NPV (with discount rates of 6% and 8%)

2. IRR
3. NFV (with discount rate of 10%)
4. PB
5. DPB (with discount rate of 10%)
Time (years) Cash Flow ($)
0 (300)
1 150
2 200
3 250
Since all of the cash flow amounts vary from period to period, we
should use the CF worksheet.
First things first: input the data into the calculator. Our initial
cash flow goes into slot CF0 (cash flow at time 0) and the cash flows
for periods 1, 2 and 3 go into slots C01, C02 and C03 respectively.
Since the cash flows occur once per period, the frequencies F01, F02
and F03 should be 1.
Preparation: Entering Question Data
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On-screen
Instructions Key Presses
Display
Enter the CF worksheet CF CF0 = …
Clear CF worksheet of any
2ND CE|C CF0 = 0
remaining values
Enter the cash flow at t=0 300 +|- ENTER CF0 = -300
Move down to the next cash

â C01 = 0
flow slot, C01
Enter the cash flow at t=1 150 ENTER C01 = 150
Move to the frequency of cash

flow 1, F01 â F01 = 1
The F01 default is 1, so we will
leave it as is. Move down to the â C02 = 0
next cash flow slot, C02

Move to the next cash flow slot,
F02 = 1
C03, leaving F02 at default â â
value 1
C03 = 0
Now that all the data is entered, we can start calculating the
required quantities!
1. Solution: NPV
Instructions Key Presses On-screen Display
Start an NPV calculation NPV I= 0
Enter interest rate (I) of 6% 6 ENTER I= 6
Move to NPV display â NPV = 0
Compute NPV CPT NPV = 229.41

Now start a new NPV
calculation. Note that it’s not NPV I=6
necessary to clear anything.
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Enter discount rate (I) of 8% 8 ENTER I=8

Move to NPV display. The
screen shows the NPV of the â NPV = 229.41
previous calculation
Compute new NPV CPT NPV = 208.81
Answer:
NPV at discount rate 6% = $229.41
NPV at discount rate 8% = $208.81
2. Solution: IRR
After performing the previous NPV calculations, we continue to

IRR:
Start an IRR calculation IRR IRR = 0
Compute IRR CPT IRR = 40.070
Answer:
IRR = 40.07%
The BA II Professional can calculate the values to

NFV, PB and DPB automatically.
With the BA II Plus, you’ll have to calculate these

manually.
Tip ‘Manual calculations’ may sound daunting, but

practically speaking there is not much difference in
calculation time between the two calculator’s
methods.
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3. Solution: Net Future Value (NFV)
Using the BA II Plus, NFV can be manually calculated from NPV

relatively easily with the formula: NFV = NPV x (1 + I)n, where I is
the discount rate and n is the number of periods.
On-screen
BA II Plus Instructions Key Presses
Display
Start a new NPV calculation.
The screen shows the I value NPV I= 8
of the previous calculation
Enter interest rate (I) of 10% 10 ENTER I = 10
Move to NPV display â NPV = 208.81
Compute new NPV CPT NPV = 189.48
Calculate NFV for t=3:

× 1.1 yx 3 252.2
NPV x (1 + I)3
The BA II Plus Professional can calculate the NFV directly for you.
BA II Plus Professional On-screen

Key Presses
Instructions Display
Start a new NPV calculation.
The screen shows the I value NPV I= 8
of the previous calculation
Enter interest rate (I) of 10% 10 ENTER I = 10

Move to NPV display. The
screen shows the NPV of the â NPV = 208.81
previous calculation
Move past NPV to NFV â NFV = 0
Calculate NFV for t=3 CPT NFV = 252.20
Answer:
NFV = $252.20
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4. Solution: Payback Period (PB)
It is possible to calculate PB using the BA II Plus. The most

straightforward method is to manually calculate NPV t=0, t=1, t=2
and so on, observing when does NPV switch to a positive value
(hence ‘payback’ achieved). This can be done in normal arithmetic
mode, without the cash flow worksheet.
There is no need to factor in discount rates when

calculating the payback period. You’ll use the
discount rate when calculating the discounted
Attention payback period (in question 5)
On-screen
Display
Enter normal arithmetic
CE|C CE|C 0
mode and clear all
Enter CF at t=0 (CF0) 300 +|- -300

Calculate cash at t=1:
= CF0 + C01 + 150 = -150
= -300 + 150
Calculate cash at t=2:
= C01 + C02 + 200 = 50
= -150 + 200
We therefore know that the payback period is between t=1 and

t=2, since NPV at t=1 is negative (not paid back yet) and NPV at
t=2 is positive (paid back).
We can continue on to calculate the exact payback period by

calculating when will the cash balance be exactly 0, assuming a
linear payment throughout the periods:
On-screen
Display
!!!"# !"#
PB = = 150 ÷ 200 = 1.75
!"# !""
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PB is easily calculable with the BA II Plus Professional with the

cash flow worksheet. Carrying on from calculating the NFV from
question 3:

Key Presses
Move past NFV to PB â PB = 0
Compute PB CPT PB = 1.75
Answer:
PB = 1.75 years
4. Solution: Discounted Payback Period (DPB)

To calculate DPB using the BA II Plus, we use a method similar to
the one we used for PB, this but this time we also factor in the
discount rate (in this case, 10%):
On-screen
Display
Enter normal arithmetic

CE|C CE|C 0
mode and clear all
Enter NPV at t=0 (NPV0),

which is the cash flow at 300 +|- -300
t=0.
Calculate NPV1:
× 1.1 + 150
= NPV0 x (1 + I) + C01 -180
=
= -300 x (1.1) + 150
Calculate NPV2:
CF â â
= NPV1 x (1 + I) + C02 2
â 200 ENTER
= -180 x (1.1) + 200
!!!"#$ !"#
PB = = 150 ÷ 200 = 1.99
!"#$ !""
Again, DPB is easily calculable with the BA II Plus Professional

with the cash flow worksheet. Carrying on from calculating the PB
from question 4:
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Key Presses
Move past PB to DPB â DPB = 0
Compute DPB CPT PB = 1.99
DPB = 1.99 years
To quit CF mode, press QUIT: 2ND CPT
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Permutations & Combinations

In probability theory, permutations nPr is the number of ways that
r objects from a set of n objects can be arranged in order, whereas
combinations nCr is the number of ways that r objects can be
chosen from a set of n objects.
Combinations
Example: 6C4. How many different ways are there of

selecting 4 objects from a set of 6?
6 2ND + 4 =
Answer: 15
Permutations
Example: 6P4. How many different ways are there of

selecting 4 objects from a set of 6, and then arranging them
in order?
6 2ND - 4 =
Answer: 360
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Effective & Nominal Yield
The ICONV function
The ICONV function allows you to switch between effective and

nominal yield.
Example: The yield on a bond is 6% with quarterly

compounding. What is the effective annual yield?
Enter the ICONV function 2ND 2 NOM = …
Enter the nominal yield 6% 6 ENTER NOM = 6

Move to the C/Y field
(compounding periods per á C/Y = …
year)
Enter 4 (quarterly
4 ENTER C/Y = 4
compounding)
Move to effective yield (EFF)
á CPT EFF = 6.136…
field and compute
Answer:
Effective annual yield = 6.14%
Likewise, you can also calculate the nominal yield from the
effective yield and number of compounding periods.
Example: Over a one-year period, a $100 investment

increases in value to $120. What is the nominal yield with
semi-annual compounding?
Enter the ICONV function 2ND 2 NOM = 0
Move to the EFF field â EFF = …
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Enter the effective yield:

$"#$!$"## 20 ENTER EFF = 20
= 20%
$"##
Move to the C/Y field
(compounding periods per â C/Y = …
year)
Enter 2 (semi-annual
2 ENTER C/Y = 2
compounding)
Move to nominal yield (NOM)
â CPT NOM = 19.089…
field and compute
Answer:
Nominal yield = 19.09%
To approximate continuous compounding, simply

enter a large number (e.g. 999,999) and calculate as
normal.
Using the question above as an example, enter

Tip 999,999 into the C/Y field, keep the effective yield
at 20%, and compute the nominal yield NOM. This
should give you NOM = 18.23%.
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Depreciation (DEPR mode)

The various methods of calculating depreciation questions are best
demonstrated with the same example:
A company purchases an electric car for $100,000 and is

expecting to use it over 8 years, with a salvage value of
$10,000. Using these methods:
• the Straight Line Depreciation (SL) method,

• the Sum-of-the-years’-digits Depreciation (SYD)
method,
• and the Double Declining Balance Depreciation
(DB) method,
calculate:
• the annual depreciation,

• the net book value,
• and the remaining depreciable value
of the electric car after year 6.
Straight Line Depreciation (SL method)
It’s good practice to always remember to clear your

sheet before starting a new calculation!
Tip
Enter the DEPR function 2ND 4 …
2ND ENTER
If screen does not show SL,
(repeat until SL SL
toggle SET until SL is shown
shown)
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Clear the worksheet 2ND CE|C SL
Move to LIF (lifetime) â LIF = 1
Enter the expected lifetime, 8

8 ENTER LIF = 8
years
Move to M01 (1st month of
â M01 = 1
depreciation)
Move to CST (original cost) â CST = 0
Enter the original cost of the

100,000 ENTER CST = 100,000
car, $100,000
Move to SAL (salvage value) â SAL = 0
Enter salvage value, $10,000 10,000 ENTER SAL = 10,000
Move to YR (year end) â YR = 1
Enter YR = 6 (net book value

6 ENTER YR = 6
after year 6)
Show calculated depreciation
â DEP = 11,250
DEP
Show calculated
residual/remaining book â RBV = 32,500
value RBV
Show calculated remaining
â RDV = 22,500
depreciable value RDV
Remaining book value = remaining depreciable

value + salvage value, or:
Tip RBV = RDV + SAL
Answer:
Annual Depreciation = $11,250
Net Book Value = $32,500
Remaining Depreciable Value = $22,500
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Sum-of-the-years’-digits Depreciation (SYD method)
To demonstrate the SYD method, we will continue from the SL

example, using the previously entered values:

SL (from previous
Enter the DEPR function 2ND 4
example)
Toggle to SYD mode 2ND ENTER SYD

Move to DEP, leaving all
other values as per previous â x6 DEP = 7,500
(SL) example
Show calculated
residual/remaining book â RBV = 17,500
value RBV
â RDV = 7,500
depreciable value RDV
Answer:
Double Declining Balance Depreciation (DB method)
To demonstrate the DB method, we will continue from the SYD/SL

example, using the previously entered values:
SYD (from previous

Enter the DEPR function 2ND 4
example)
Toggle to DB mode 2ND ENTER DB

Move to DEP, leaving all
other values as per previous â x6 DEP = 5,932.61…
(SL) example
Show calculated
residual/remaining book â RBV = 17,797.85…
value RBV
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depreciable value RDV â RDV = 7,797.85…
Answer:
Other methods
You may have noticed that there are other depreciation

methods as well, such as DBX (declining balance with
crossover to straight line method), SLF or DBF (French
straight line or declining balance methods).
Tip
You can access these modes using the same methods
outlined for SYD and DB, but these methods are
unlikely to be used in the CFA exam.
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Statistical Functions
This is one of the relatively unknown functions that is optional (as
sometimes it’s quicker to calculate directly), but may save a ton of
time for Quants or Portfolio Management topics.
Let’s use this simple data set as an example:
{4, 5, 9, 12, 21}
On-screen
Instructions Key Presses
Display
Enter the DATA worksheet 2ND 7 X01 = …
Clear the worksheet 2ND CE|C X01 = 0
Enter the first data point: 4 4 ENTER X01 = 4
Move to Y01 (frequency) â Y01 = 1
Leave Y01 = 1, moving on to

â X02 = 0
X02
5 ENTER â â X02 = 5
9 ENTER â â X03 = 9
Repeat for remaining data:
12 ENTER â â X04 = 12
21 ENTER X05 = 21
Switch to STAT mode 2ND 8 …

2ND ENTER
If screen does not show 1-V,
(repeat until 1-V 1-V
toggle SET until 1-V is shown
shown)
View the number of values, n â n=5
View the mean, ! â ! = 10.2
View the sample standard

â Sx = 6.833…
deviation, Sx
View the population
â σx = 5
standard deviation, σx
Answer:
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Number of values = 5
Sample mean = 10.2
Sample standard deviation = 6.83
Population standard deviation = 5
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Additional Stuff
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Calculator Apps
Thanks to smartphones, you can also find a range of Android and
iOS apps to simulate your BA II Plus calculator. While you can’t
use them for the actual exam, it can be a handy stand-in when
you’re revising and can’t bring your calculator everywhere.
To view our latest recommended apps, visit

http://go.300hours.com/calculator.
Questions?
If you have any questions about how to use your BA II Plus
calculator for the CFA exam, just post a question at our forum
(http://forum.300hours.com) and we’ll get you sorted!
More Help on the CFA Exams

300 Hours is a free resource for all CFA candidates. Our regular
articles, materials discounts, study tips and live help from
charterholders have consistently helped our readers improve their
pass rates.
300 Hours is free for everyone – just visit and bookmark

www.300hours.com.
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3H BAII Plus Guide (ebook)

Personal Finance (Mount Royal University)

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CFA® exam guide to the

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CFA Exam Approved Calculators 8

Calculator Batteries: Rated Life & Replacements 10

Setting Up and Fine-tuning Your BA II Plus Calculator 12

The Simple Stuff 16

Becoming a Master of Memory with STO and RCL 20

Additional Secret Tips 25

Topic Specific Functions 29

Discounted Cash Flow 30

Permutations & Combinations 40

Effective & Nominal Yield 41

Depreciation (DEPR mode) 43

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Downloaded by Long Hoàng (danghoanglong1995@gmail.com)

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This guide teaches you how to use your calculator like a

Focusing on every function available to your calculator will simply

Throughout this guide, we’ll highlight contextual points using the

Advice that may help you avoid accidents, calculation

An extra tip to help you make the most of the discussed

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Downloaded by Long Hoàng (danghoanglong1995@gmail.com)

CFA Exam Approved Calculators

However, within these two main types, there are several

Texas Instruments BA II Plus (including BA II Plus Professional)

The Texas Instruments BA II Plus has a Professional version,

If you need to borrow a calculator during the exam, any of these

BA II Plus BA II Plus Pro BA II Plus BA II Plus Pro

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Hewlett Packard 12C

The HP 12C uses Reverse Polish Notation, which can make it

Below are some examples of how they look like:

HP 12C HP 12C Platinum

HP 12C 30th anniversary HP 12C Prestige

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How to Replace the Batteries in the TI BA II Plus calculator

1. Turn off the calculator.

3. Using the screwdriver, remove the screws from the metal

4. Tip the calculator slightly to remove the old battery,

6. Reattach the battery cover and its screws.

Ensure you install the correct battery type to avoid

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Replacing the battery will reset your calculator (i.e.

If you prefer, you’ll also be able to bring a small screwdriver and

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Setting Up and Fine-tuning Your BA

In this manual, when a sequence of keys calls a

Step 1: Understand the 2ND key

Most buttons on your calculator has a primary function, shown on

Pressing 2ND before pressing another key accesses their

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Step 2: Set a floating number of decimal places

For calculation results that are in decimals, you’ll want your

● Enter FORMAT mode: 2ND .

● Select DEC = 9 to set the floating decimal function: 9

● Quit FORMAT mode: 2ND CPT