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You are on page 1of 45

The application manual for the financial calculator (FC200V) is being prepared with a view to

help in understanding the functional part of the calculator. In the process help from various

sources containing the mathematical and statistical formula have been taken, utmost care has

been taken not to copy the data from these sources.

The examples wherever necessary has been provided to understand the operational part of

the calculator.

The area of mathematics is very vast and understanding completely by one person is very

difficult. The sample book is designed to help all users to have the conceptual knowledge

coupled with practical aspect of the same.

Happy computing!

APPLICATION MANUAL

FINANCIAL CALCULATORS FC100V, FC200V

Specific Applications in addition to various other applications that can be performed by FC are

summarized below:

Amortization calculations

Statistics calculations

Depreciation calculation

Simple Interest calculation

Explanation

Simple Interest calculations as performed mainly by banks and loan providers or person

lending or borrowing funds at simple rate of interest. The formula for calculation shall be as

follows:

N = Number of interest periods

SFV= PV+SI I = Annual interest rate

SI = Simple Interest

SFV=Interest + principal

Example

An amount of 5000/- is borrowed at the rate of 9% per annum for 90 days, calculate the

simple interest.

Principal (PV) = INR 5000 5000x90/365x9/100

Interest (I %) = 9%

Days (n) = 90

SI = solve =110.95

SFV = solve =5110.95

Operation

Press key and using the cursor key enter the following data with exe key

SI= -110.958904 1

Simple Int.

Set : 365 or 360 days

Dys : 90 2

I% SFV=: -5110.958904

9

PV : 5000

SI : Solve 3

SFV SI= -110.958904

: Solve

ALL SFV=-5110.958904

: Solve

For calculating the simple interest bring the cursor key to SI and enter the solve key and the

answer appears as 1 above Press ESC key and bring the cursor by using the Key and enter the

Solve key and the answer appears as 2 and using the ESC key bring the cursor to ALL key and

press SOLVE key and the answer appears as 3 above.

Note: The days in a year can be adjusted as 360 days or 365 days depending upon the usage

to adjust press SMPL and then SET key and enter EXE key and chose the option of 360

or 365 days.

Compound Interest calculation

Explanation

Most of the banks and person dealing with funds use the word compounding interest annually,

semi-annually or quarterly etc. to understand better compound interest would mean

calculating the interest on interest also. The mathematical formula shall be as follow:

• If the interest rates for the successive fixed periods are r1%, r2%, r3% ..., then A

(amount) is given by

For example continue with the same example in previous sheet. If the period is 3 years then

CI would be

A =5000 + 1475.145 = 6475.145

Operation

Press CMPD key

Input the following using scroll and exe keys

Set : begin / end select End using scroll and exe key

N : press 3 and enter exe key

I% : press 9 and enter exe key

PV : press 5000 and enter exe key

PMT : leave blank or press 0 and enter exe key*

FV : Press solve key, see the answer appears as -6475.145

Note: Using scroll key please enter the P/Y = 1 and C/Y = 1 as the same represents the

Installments per year and Compounding per year respectively. If the compounding is

semi annually then C/Y should be selected as 2 and for quarterly the same should be

selected as 4.

Note: To clear variables from the memory is to press SHIFT key and 9 key and EXE

key and chose the correct option to clear either setup, memory or all

variables from the memory

EMI calculation CMPD continues….

A very important tool for finance companies having the business of lending money and all

those also borrowing money and in the need to know that how much monthly installment need

to be paid for a particular loan.

Typically a person needs to know the present value of amount borrowed/lend and the interest

rate to be paid also the total number of installments to be used while returning the amount

borrowed. i.e.

I% = interest rate i.e. 12% p.a. i= I%/12/100 = 0.010

N = number of installments per year i.e. 15 years = 180 times

A typical way of calculating the EMI shall be taking the help of computer or a long sheet of

paper and lot of time in computing and yet not very sure about the way of doing. The formula

shall be as follows:

PV x i x (1+ i)ⁿ

=

(1+ i)ⁿ-1

180

= 50000 x 0.01 x (1.01)

180

(1.01) -1

= 600.08

EMI calculation without a calculator having the solving power like this is just impossible and

doing little simulations and variations in interest, principal etc, the working becomes very

tough, but the use of FC 200V is very simple, faster and economical, let’s see

Press CMPD key and using the scroll and exe key enter the following data

N = Press 180 and enter Exe key (15 years x 12 months)

I% = Press 12 and enter Exe key

PV = 50000 exe key

PMT = Solve key

FV = Press 0 and enter Exe key

P/Y =12 as the installments per year is 12 the duration of loan is 15 years

C/Y =12 as the compounding also is monthly so in a year 12 compounding

Scroll back to PMT key and enter solve key as the answer flashes -600.08.

Is it not quite amazing the result is produced in less than a minute as against probably one

hour?

Now we can use variation just like mortgage calculators available on the web and computer

spreadsheets e.g.

N = 180 periods (15 years x 12 months)

I% = 12

PV = solve key

PMT = -600.08

FV =0

P/Y =12 as the installments per year is 12 the duration of loan is 15 years

C/Y =12 as the compounding also is monthly so in a year 12 compounding

2. Calculate the maximum Rate of interest can be borne if EMI, period and PV is

known

N = 180 periods (15 years x 12 months)

I% = Solve key

PV = 50000

PMT = -600.08

FV =0

P/Y =12 as the installments per year is 12 the duration of loan is 15 years

C/Y =12 as the compounding also is monthly so in a year 12 compounding

3. Calculate the Number of periods (i.e years) wherein loan can be repaid if PV, I%

and EMI is known

N = Solve key

I% = 12

PV = 50000

PMT = -600.08

FV =0

P/Y =12 as the installments per year is 12 the duration of loan is 15 years

C/Y =12 as the compounding also is monthly so in a year 12 compounding

Just in simple way skip the term we want to know and enter the data in rest of the terms as

before, using the scroll key come back to the term we want to know and press solve key and

result is available.

Cash Flow Calculation

Explanation

The application mainly is used by analysis to appraise an investment proposal having a fixed

stream of cash inflow after a fixed period of cash outflow. Typically an investor need to know

the following to do the analysis i.e. cash outflow and cash inflow and certain financial tools to

help him to take the decision, the tools could be Internal Rate of Return (IRR), Net Present

Value (NPV), Net Future Value (NFV) and Payback Period (PBP)

PBP The payback period is defined as the number of years required to recover a project’s

cost.

NPV The net present value (NPV) method discounts all cash flows at the project’s cost of

capital and then sums those cash flows.

IRR The internal rate of return (IRR) is defined as the discount rate which forces a

project’s NPV to equal to zero.

Cash Inflow

Cash Outflow

Example

An investment would outlay an expenditure of INR 100000 in the year0 and thereafter for the

next four years it generates the cash inflow at a consistent flow of 40000 per year.

The NPV shall be as follows:

As you know, money devalues over time. The rate at which it does is commonly referred to as

the "discount rate". Therefore, let's say you have a payment/income profile as shown above

and we assume a discount rate of 12%. If you take the difference between the net present

value of the payments and the net present value of the returns, you get the net present value

of the investment. In the case shown above that turns out to be 121493.96-

100000=21493.96. (NPV)

IRR

If we equate the net present value to zero we get the internal rate of return, a rate which puts

cash outflow-discounted cash inflow equal to zero, the significance of IRR is that for example

the IRR for the above said case is 21.86% and if the money devalues at 22% then you make

nothing on your investment. So prudence say that you must make investment that fetches

you return greater than 22%.

The IRR can be derived only be trial and error method and a guessed cost of capital should be

estimated otherwise the trial and error method also takes long time and is irritating.

In the given case if we discount the cash flow by an estimated rate of capital of 21% shall

give us the NPV equal to +1617.64

Again using the trial method we forward the rate to 22% and see the NPV coming out to be

as -254.38 but the object is to bring the discounted cost of capital equal to Zero so by using

the trial and error method we use the following

Formula

1617.64

21% + ----------------- X 1

1617.64+254.38

= 21.86% (IRR)

We have seen how cumbersome procedure is used to calculate the IRR and NPV imagine a

person evaluating the 50-100 proposals a day shall get mad and crazy. The solution provided

by FC 200 V is quite simple and we just have to input the data as follows:

Operation

Press Cash Key and using the scroll and exe key input the data as follow

Csh : Press exe key and input that cash out flow and cash inflow

Cash outflows should be represented as (-) and inflow as (+)

: using ESC key and scroll key press following

IRR : Press solve key and the result shall be 21.86%

PBP : Press solve key and the result shall be 2.50 years*

NFV : Press solve key and the result shall be +60000*

*remember to remove the I%=12% / 21.86% otherwise the PBP shall be calculated on

DCF@12% and the result shall be 3.15 years / 3.99 years

Is it not very simple and clean way of computing complex things, yes thanks to FC 200V

Remember to be patient while solving IRR as calculator processes the data at the speed of _

Note: Data editor can input the maximum number of 80 variables in case of 1-var is selected

or 40 in case of 2- var is selected (i.e. X, Y or X and Freq ) and 26 in case of X, Y and

Freq is selected. To choose the option Press STAT Key and chose 1- Var press exe and

AC key and select again CASH key and in the case of more than one variable using the

same procedure above select other than 1-Var mode.

Interest rate conversion calculations

Explanation

The conversion of annual interest rate into effective interest rate is usually used when the

compounding per year is more than one. The conventional way of calculating EEF (effective

interest rate) is:

n

APR/100

EEF = 1+ -1 x 100 APR Annual percentage rate (%)

n EEF Effective interest rate (%)

N number of compounding

EEF/100 1/n

APR = 1+ -1 x n x 100

Example

Example of converting the annual rate is where an investor gets the return on an investment

other than annual basis then his first curiosity shall be to know what my effective annual

interest rate is. E.g.

Interest rate: 12% compounded semi annually, the EEF shall be 12.36% and if the EEF is 14%

then APR shall be 13.54%. Similarly if the compounding can be quarterly (4) or monthly (12)

and accordingly results can be obtained but how complex is to solve the power of 12.

Operation

I% = Press 12 and enter exe key

Other way could be press i% =14 and press APR key the result shall be 13.54% as described

above.

Cost / selling price / margin calculations

Explanation

Cost and their relation with the selling price is very well known, the difference is known as

margin which could be profit or loss. The formula for calculation shall be as follows:

CST= cost

SEL= selling price

MRG=margin

Operation

Select COST Key

By inputting any two values the third value can be calculated, by using the following way, it

can be done:

CST = Press 1200 and enter exe key Note: By inputting any two variables third

SEL = Press 1500 and enter exe key variable can be calculated, typically

MRG= press solve key answer shall be 20% margin is the selling price less cost

and divided by selling price as the

%age of sale price, conversely many

people use the cost as the base price for generating the %age of value addition to the

cost.

Amortization calculations

Explanation

Amortization means "the systemic payment plan -- such as a monthly payment -- so that your

loan is paid off over the specified loan period."

So an amortized loan is for one specific amount that is to be paid off by a certain date, usually

in equal monthly installments. Your car loan and home loan fit that definition. Your credit card

account doesn't because it's a revolving loan with no fixed payoff date.

A part of the payment goes toward the interest cost and the remainder of the payment goes

toward the principal amount -- the amount borrowed,"

Interest is computed on the current amount owed "and thus will become progressively smaller

as the ending balance of the loan reduces."

In simple meaning when you borrow money the first repayment of loan installment, the

interest is on the full amount of loan but as you continue to pay back the principal amount

keeps on reducing so is the interest amount.

But if you want to know the breakup of any EMI or installment into Principal and Interest it

shall be a quite difficult task for common man.

Let us understand the concept of amortization in simple amortization calculator. The concept

of PMT, interest, FV, BAL, INT, PRN, ∑INT, ∑ PRN ETC can be understood with an easy

example.

Example

In the given case the PV = 10000 and interest rate is 2% and the PMT working out to be

286.43 over a period of 3 years i.e. N=36 months, please note the Amortization table helps

you to calculate the interest and principal on any of the installment specified. The requirement

is to know the PMT = EMI = -286.43 (remember EMI can be calculated by CMPD key),

PV=principal = 10000 and Interest = i%=2. You can calculate between any month to any

month i.e. PM1 to PM2, remember that PM2 needs to be greater than PM1.

Break up of PMT

300

240

180

Amount

120

60

0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

Months

Interest

Principal

Loan Calculator

Scheduled

Loan Amount $10,000.00 Payment $ 286.43

Scheduled

Annual Interest Number of

Rate 2.00 % Payments 36

Loan Period Actual Number

in Years 3 of Payments 36

Number of

Payments Total Early

Per Year 12 Payments $ -

Start Date

of Loan 01/04/2004 Total Interest $ 311.33

Optional

Extra

Payments

Lender

Name: Anil Chaudhry

Pm

tNo Payment Beginning Scheduled Extra Total Ending

. Date Balance Payment Payment Payment Principal Interest Balance

2 01/06/2004 9,730.24 286.43 - 286.43 270.21 16.22 9,460.03

3 01/07/2004 9,460.03 286.43 - 286.43 270.66 15.77 9,189.37

4 01/08/2004 9,189.37 286.43 - 286.43 271.11 15.32 8,918.26

5 01/09/2004 8,918.26 286.43 - 286.43 271.56 14.86 8,646.70

6 01/10/2004 8,646.70 286.43 - 286.43 272.01 14.41 8,374.69

7 01/11/2004 8,374.69 286.43 - 286.43 272.47 13.96 8,102.22

8 01/12/2004 8,102.22 286.43 - 286.43 272.92 13.50 7,829.30

9 01/01/2005 7,829.30 286.43 - 286.43 273.38 13.05 7,555.92

10 01/02/2005 7,555.92 286.43 - 286.43 273.83 12.59 7,282.09

11 01/03/2005 7,282.09 286.43 - 286.43 274.29 12.14 7,007.80

12 01/04/2005 7,007.80 286.43 - 286.43 274.75 11.68 6,733.05

13 01/05/2005 6,733.05 286.43 - 286.43 275.20 11.22 6,457.85

14 01/06/2005 6,457.85 286.43 - 286.43 275.66 10.76 6,182.18

15 01/07/2005 6,182.18 286.43 - 286.43 276.12 10.30 5,906.06

16 01/08/2005 5,906.06 286.43 - 286.43 276.58 9.84 5,629.48

17 01/09/2005 5,629.48 286.43 - 286.43 277.04 9.38 5,352.44

18 01/10/2005 5,352.44 286.43 - 286.43 277.51 8.92 5,074.93

19 01/11/2005 5,074.93 286.43 - 286.43 277.97 8.46 4,796.96

20 01/12/2005 4,796.96 286.43 - 286.43 278.43 7.99 4,518.53

21 01/01/2006 4,518.53 286.43 - 286.43 278.89 7.53 4,239.64

22 01/02/2006 4,239.64 286.43 - 286.43 279.36 7.07 3,960.28

23 01/03/2006 3,960.28 286.43 - 286.43 279.83 6.60 3,680.45

24 01/04/2006 3,680.45 286.43 - 286.43 280.29 6.13 3,400.16

25 01/05/2006 3,400.16 286.43 - 286.43 280.76 5.67 3,119.40

26 01/06/2006 3,119.40 286.43 - 286.43 281.23 5.20 2,838.18

27 01/07/2006 2,838.18 286.43 - 286.43 281.70 4.73 2,556.48

28 01/08/2006 2,556.48 286.43 - 286.43 282.16 4.26 2,274.32

29 01/09/2006 2,274.32 286.43 - 286.43 282.64 3.79 1,991.68

30 01/10/2006 1,991.68 286.43 - 286.43 283.11 3.32 1,708.57

31 01/11/2006 1,708.57 286.43 - 286.43 283.58 2.85 1,425.00

32 01/12/2006 1,425.00 286.43 - 286.43 284.05 2.37 1,140.95

33 01/01/2007 1,140.95 286.43 - 286.43 284.52 1.90 856.42

34 01/02/2007 856.42 286.43 - 286.43 285.00 1.43 571.42

35 01/03/2007 571.42 286.43 - 286.43 285.47 0.95 285.95

36 01/04/2007 285.95 286.43 - 285.95 285.47 0.48 0.00

Operation

Finding the breakup of any PMT for any month shall be difficult task, however the same shall

be quite easy in FC200, see the steps

PM1 : Enter 1 press exe; you may enter any particular month

PM2 : Enter 25 Press exe; you may enter any particular month, but should be greater than PM1

N : 36 press exe; (3 years and 12 months in a year)

I% : 2 press exe; the interest %

PV : 10000 press exe; the principal amount

PMT : enter -286.43 press exe; the PMT can be worked out by using CMPD key

FV : 0 press exe; should be left blank

P/Y : 12 press exe; payments in a year

C/Y : 12 press exe; compounding in a year

1. The answer pertains to the principal balance after 25th installment, please refer the

table

2. The answer pertains to the interest component in the first installment (PM1) please

refer the table

3. The answer pertains to the principal component in the first installment (PM1) please

refer the table

4. The answer pertains to the total interest paid from 1st to 25th installment please refer

the table

5. The answer pertains to the total principal paid from 1st to 25th installment please refer

the table

The simulation from any installment to any installment is possible, quite simple way.

Note : for going back to default input screen use ESC key

Day or date calculation

Explanation

The day’s mode helps you to calculate the number of days from any specific date to any

specific date.

If days and d2 is known then d1 can be calculated

If d1 and d2 is known then days can be calculated

D1 D2

Days

Mode of entering the date as DMY or MDY, the same can be selected in setup key

Operation

Let us see the practical aspect of the same

Press DAYS key and using the scroll key enter the following

Set : 365

D1 : 30072004 i.e. July 30, 2004

D2 : 17052005 i.e. May 17, 2005

Dys : press SOLVE key and the answer shall be 291 days

By leaving any one variable blank and filling the other two variables, we can find the

third variable.

The option of date format can be chosen either DDMMYYYY or MMDDYYYY from the

setup screen.

Depreciation calculation

Explanation

With the help of FC200 we can calculate the following four popular method of

calculating the depreciation on fixed assets:

Depreciation means wear and tear of the assets due to its usage.

Fixed Percentage Method (FP)

Sum of Years Digit Method (SYD)

Declining Method or written Down Value Method (WDV)

S=Salvage value if any

N=Number of years

S=Salvage value if any

N=Number of years

Sum-of –years

Sum-of –years

Sum-of –years

.

.

Sum-of –years

Depreciation rate =

Operation

The following setting values should be done (hypothetical values)

Press DEPR key and using the scroll key and EXE key press following values

I% = 25 (fixed rate of depreciation incase of Fixed percentage method)

= 200 (depreciation factor in case of Declining Method)

PV = 12000 (Cost of the assets)

FV = 0 (residual value if any)

‘j = 1 (year for which the depreciation is being calculated)

YR1 = 12 (number of months in the first year)*

*In the initial year of buying the assets it is quite possible that depreciation is allowed

only for part of the year in that case required number of months need to be entered.

SL = SOLVE Key

SL = 2000

RDV = 10000

‘j =1

depreciation

RDV = 9000 RDV = 8571.42

‘j =1 ‘j =1

RDV means the value after RDV means the value after

depreciation depreciation

DB = SOLVE Key

DB = 4000

RDV = 8000

‘j =1

depreciation

Don’t forget to change the I%=as

factor instead of Fixed percentage

With the help of FC200V the calculation for any year’s depreciation is possible also the

factor for

Break even point analysis

Explanation

This is a very common term used often by Finance Manager or Production Manager, a

point of sales or a point of quantities to sell where the company would break even or

to ore specifically company would neither gain nor lose. The profit at such sales would

become Nil or 0%.

This tool is very important for Managers as it suggest that company to break even

must sell at least N number of quantities.

(Unit) (Unit)

(Unit)

For calculating the BE we need selling price per unit (PRC), variable cost per unit

Press BEVN key and using the scroll key enter the following values

Press exe key at BEV and input the following Hypothetical data

PRF / ratio press exe key using again exe key select ant of the

following

1. PRF

2. r% or

B-even press exe key and using again exe key select any of

the following

1. quantities (QBE)

2. Sales (SBE)

Operation

PRC = 100

VCU = 75

FC = 12000

PRF/ R%= 0*

*In case the company wants to know how much quantities need to be sold for

achieving the profit (PRF) of say 10000, then after selecting PRF above enter the PRF /

r% as 10000 and then QBE and SBE can be calculated for a profit target of 10000

* the option can be used if company wants to know that how much quantities need to

be sold for achieving the profit % of say 10%, then after selecting r% above enter the

PRF / r% as 10 and then QBE and SBE can be calculated for a profit target of 10%.

Margin of safety denotes that how much sales can be dropped before attaining the

losses. For example if sales are 120000 and SBE is 48000 then MOS shall be 0.60.

That denotes that sales from the present levels can be dropped by 60% before

Continuing from the last hypothetical figures where the SBE was 48000 and suppose

the actual sales are 120000 that means the actual sales are more than the Break even

SBE : 48000

MOS : 0.60

The extent to which a business uses fixed costs (compared to variable costs) in its

operations is referred to as "operating leverage." The greater the use of operating

leverage (fixed costs, often associated with fixed assets), the larger the increase in

profits as sales rise and the larger the increase in loss as sales fall.

= Sales less Variable cost / sales less total cost

Degree of operating

Input the sales SAL : 120000

variable cost and the total

VC : 90000

fixed cost.

FC : 10000

earnings per share [EPS] that results from a given percentage change in earnings

before interest and taxes (EBIT), and is calculated as follows:

This calculation produces an index number which if, for example, is 1.43, means that a

100 percent increase in EBIT would result in a 143 percent increase in earnings per

share

In simple terms the DFL means the impact of Interest expenses on the earnings of the

company

DEGREE OF COMBINED

LEVERAGE (DCL)

That is: DTL=DOL*DFL

Where: DTL=degree of total leverage.

DOL=degree of operating leverage.

DFL=degree of financial leverage.

1. Degree of total leverage measures the percentage change in EPS that results from

a change in one percent in output.

2. It assists in measuring the firm’s total risk.

Statistical analysis

Mean as a common meaning denotes the center and arithmetically represents the

distribution is. For two random variables the one on the left is more dispersed than the

one on the right. It has a higher variance. In more common terminology we can say

that it measures the variability from the mean.

• Population variance

• Sample Variance

The population variance is the mean squared deviation from the population mean:

2

σ = Population Variance

µ = Mean

Example of Sample variance

In practice population variance cannot be computed directly because the entire population

Sample variance can be calculated in the similar way as Population variance except that

the divisional factor is one number less than the total numbers i.e N

∑ ( xi − x)

s =

2 i= 1

n− 1

2

S = Sample variance = (σ − 1)2

X = Sample mean data

Standard Deviation

σ = σ 2

σ − 1= (σ − 1) 2

Let us take the an example having one variable and calculate above said

Press Setup key and using the scroll key STAT: On/Off key Select On by

pressing EXE

1- 1- Var

Press STAT key and select type

: exe

2- A + B X

: exe

_ + cX2

3-

: exe

4- In X

: exe

5- e^X

: exe

6- a + b^X

: exe

7- a +X^B

: exe

8- 1/X

: exe

Example for 1- Var (single variable)

Press Stat and chose option from type 1-var by pressing exe key and enter the

following data using cursor and exe key

X freq

1 10 1

2 12 1

3 14 1

4 16 1

5 18 1

6 20 1

7 18 1

8 16 1

9 14 1

10 12 1

Press AC key and Shift S-Menu and by selecting the appropriate digit following options

available

1. Type 2. Data

3. Edit 4. Sum

5. Var 6. MinMax

Press 2 we get the option of more data entry

Press 3 we get the option of editing the data

Sum of variable ∑ x

∑ x2 ∑ x2

Press Exe

0 2340

Please note for all calculation Press AC key and Shift – S-menu key and then

press the required option

∑x ∑x

0 150

Press exe

Press AC-Shift-S-Menu and option 5, we get the following screen

RGB 204,255,153

1: n 2: X

3: Xσn 4: xσn-1

Press 1:

n n

Press exe Press exe

0 10

Press exe 15

0

Xσn Xσn

Press exe 3

0

Xσn-1 Xσn-1

Press exe

0 3.162277

Press 1

minX minX

0 Press exe 10

Press AC – Shift – S-Menu- 6- we get options of 2

maxX maxX

0 Press exe 20

In case of two variables the frequency column is used for another variable and the calculation

is based on the following formula and the formula shall be based on the following shortcut of

variance and Standard Deviation.

σ = ∑ X - ( X)/n

∑

******

Commands when linear regression calculation (A+ BX) is selected

When linear regression calculation is selected the calculation is performed by the following

model is selected i.e. a + b X and the calculation are done based on the following:

Using FC200V following calculation is possible

n

Shift (S-menu) 5-Var 4 Xσn-1 Sample standard deviation (x data)

variable, in addition to above

Shift (S-menu) 4-sum 4 ∑y Mean of the variables ( y data)

Ŷ Ŷ

Ŷ

Example in the case of A+BX

X 2 3 4 5 6 7 8 9

Y 12 13 14 15 16 17 18 19

n

Shift (S-menu) 5-Var 4 Xσn-1 2.449489

Ŷ Ŷ=13

Commands when other types of Regression calculation(s) are selected

BX

3. Exponential Regression (e^X), model equation y= Ae

4. Power Regression (A*X^B), model equation y= AXB

Example in case of quadratic regression equation

X 2 4 6 8 10 12 14 16

Y 3 5 7 9 11 13 15 19

n

Shift (S-menu) 5-Var 4 Xσn-1 4.898979486

2

Shift (S-menu) 7-Reg 6 If X=2 then

Ŷ Ŷ = 3.25

Example in the case of Logarithmic Regression (In X), model equation y= A+BInX

X 2 4 6 8 10 12 14 16

Y 3 5 7 9 11 13 15 19

n

Shift (S-menu) 5-Var 4 Xσn-1 4.898979486

Ŷ Ŷ = 3.706473061

BX

Example in the case of Exponential Regression (e^X), model equation y= Ae

X 2 4 6 8 10 12 14 16

Y 3 5 7 9 11 13 15 19

n

Shift (S-menu) 5-Var 4 Xσn-1 4.898979486

Ŷ Ŷ = 4.27243945

Example in the case of ab Exponential Power Regression (A*b^x), model equation

X

y= AB

X 2 4 6 8 10 12 14 16

Y 3 5 7 9 11 13 15 19

n

Shift (S-menu) 5-Var 4 Xσn-1 4.898979486

Ŷ Ŷ = 4.27243945

B

Example in the case of Power Regression (A*x^b), model equation y= AX

X 2 4 6 8 10 12 14 16

Y 3 5 7 9 11 13 15 19

n

Shift (S-menu) 5-Var 4 Xσn-1 4.898979486

Ŷ Ŷ = 4.006800639

Example in the case of Inverse Regression (1/X), Model equation y= A+B/X

X 2 4 6 8 10 12 14 16

Y 3 5 7 9 11 13 15 19

n

Shift (S-menu) 5-Var 4 Xσn-1 4.898979486

Ŷ Ŷ = 5.438529776

Bond (Annualized Yield or Yield to Maturity)

The customary way of calculating the yield on Bonds purchased from the market is to typically

finding the Internal Rate of Return (IRR)

To understand Bond we must understand the complete terminology of the Bonds, e.g.

Coupon Rate = CPN = rate of interest payable on the face value of the Bonds

Purchase price = PRC = Price at which these bonds are available in the market

Redemption value = RDV = Price at which maturity value is paid back to bondholders

Term = n = Period of the bond, it can be either Fixed or can be derived from two dates

Example

A bond sold in the market at discount of 5% (face value-100, coupon rate-4%) and has a term

period of 5 years. Find out its effective return?

Year 0 -95

Year 1 04

Year 2 04

Year 3 04

Year 4 04

Year 5 104* (*Investor would get the Principal amount also in addition to Interest)

Equate the present value of all Cash flows to Zero and using the trial and error method find

out its Yield, using a discount factor of 5%, we get following

CF0(5%, 1st year)+CF1(5%, 2nd Year)+CF2(5%, 3rd Year)+CF3(5%, 4th year)+CF5(5%, 5th Year)=0

= (-95*0.9523)+(4*0.90702)+(4*0.86384)+(4*0.82270)+(104*0.78353)

=1.39

Similarly using the Discount factor at 5.25% we get the net present value as -0.374649

To be more precise the YTM shall be 5.16% where the discounted cash flows shall be nearly

equal to Zero.

Operation: Press BOND key and using scroll and exe key enter the following data:

Bond Calc

Set: Annual / Term*

N= 5: Press exe

RDV=100: press exe

CPN= 4: Press exe

PRC=-95: press exe YLD=5.159986152

YLD=Solve key

• The interest option can be selected either Annual or Semi annual and also the

period of bond can be either fixed or term

• Fixed period bonds shall give the option of putting two different dates as

purchase date and maturity date

• Term period bond give the option of only putting the number of years as the

life of the bond

If the Coupon rate is 4% and the Redemption price if 100 and to get the Yield of 8% what

should be the purchase price of the bond in the market?

Bond Calc

Set: Annual / Term*

N= 5: Press exe

RDV=100: press exe

CPN= 4: Press exe PRC= -84.02915985

PRC=Solve Key INT= 0

YLD=8: Press exe CST= =-84.02915985

The purchase price shall be 84.03 in the market to get the yield of 8% in the bond the Interest

accrued on such bond shall be zero and the purchase price including interest shall be 84.03

only

Defining the setup keys

The initial setup for various key is as per following table and to change the settings value the

procedure defined in the next pages shall be followed:

1. Payment Mode: Used in CMPD and AMRT Modes, the calculation of interest is

dependant on the payment mode i.e. in advance (begin) or after the completion of

month (end), for choosing the correct option following is the procedure:

Press Setup key and using scroll key select the following menu

Payment

Payment: End Exe Choose 1 Payment: Begin

1. Begin

2. End

2. Date Mode: Used in SMPL, DAYS and BOND Modes, the days in the year can be 365 or

360 days depending upon the usage and practice, the same can changed as followed

Date Mode

Date Mode: 365 Exe 1 360 Choose 1 Date Mode: 360

2 365

3. DN: Used in CMPD mode, these settings specifies whether Simple Interest (SI) or

Compound Interest (CI) is to be used for partial months to change the settings

DN

DN: CI Exe 1: CI Choose 2 DN: SI

2: SI

4. Periods: Used in BOND mode , Year: Annual or Semi annual coupons payment per

year, the bond can have the payment of interest either annually or semi annually. The

settings can be configured as follows:

Periods/year

Periods/Y: Annu Exe 3 Annual Choose 2 Date Mode: 365

4 Semi

5. Bond date: used in BOND mode only, Date in case of Bonds purchased the same can

be either having a fixed term or two dates can specified, i.e. Date of purchase and the

date of maturity. The initial settings can be modified as follows:

Bond date: Date Exe Bond Date Choose2 Bond Date: Term

5 Date

6 Term

6. Date Input: MDY: used in case of DAYS and BOND mode only, the dates can be input

either of the following way, Month/Day/Year (MDY) or Date/Month/Year (DMY), the

initial settings of MDY can be modified as follows:

Date Input

Date Input: MDY Exe 1 MDY Choose2 Date Mode: 365

2 DMY

7. PRF/Ratio: PRF, used in the case BEVN mode only, Profit or profit percentage can be

specified, the initial settings can be modified as follows:

PRF/Ratio: PRF 1 PRF

2 R%

8. B-Even : Quantity, used in the case BEVN mode only and the break even can be

calculated either in term of quantity or Sales amount, the initial settings of quantity can

be modified as follows:

1 Quantity

2 Sales

9. Digit Separator : used in all modes and is an option used for making the digit appearing

as

123456 Subscript mode 123,456

123456 Separator Off 123456

10 Angle, Fix, Sci and Norm modes are used in all modes and the calculations and are easy

to understand and modify the initial settings.

11. Stat: on ,used is STAT mode only and is an application which is used when the

statistical calculations are to be performed then the stat mode can be turned on or off

by following the following procedure

STAT

STAT: On Exe 1. On Choose2 STAT: Off

2. Off

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