Financial Calculation (TVM) Software for the ALGEBRA FX2.0 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
1. Before Performing Financial Calculations k TVM Mode Installing the Financial Application on your ALGEBRA FX2.0 adds a TVM icon to the Main Menu. Entering the TVM Mode displays the Financial screen like the one shown below. Financial 1 screen Financial 2 screen • 1(SMPL) .... Simple interest • 2(CMPD) ... Compound interest • 3(CASH) .... Cash flow (investment appraisal) • 4(AMT) ...... Amortization • 5(CNVT) .... Interest rate conversion • 6(g)1(COST) ... Cost, selling price, margin 2(DAYS) ...
k SET UP Items u Payment • {BGN}/{END} ........ Specifies {beginning of the period} / {end of the period} payment u Date Mode • {365}/{360} ......... Specifies calculation according to a {365-day} / {360-day} year u Periods/YR. (Bond) • {Annual}/{SEMI} ... Indicates an {annual} / {semi-annual} period Note the following points regarding SET UP screen settings whenever using the Financial Mode.
2. Simple Interest This calculator uses the following formulas to calculate simple interest. uFormula 365-day Mode 360-day Mode SI' = n × PV × i 365 SI' = n × PV × i 360 I% 100 I% i= 100 i= SI n : interest : number of interest periods PV : principal I% : annual interest SFV : principal plus interest SI = –SI' SFV = –(PV + SI') Press 1(SMPL) from the Financial 1 screen to display the following input screen for simple interest. • 1(SMPL) n ..................................
After drawing a graph, you can press 1 (TRACE) to turn on trace and read calculation results along the graph. Each press of e while trace is turned on cycles the displayed value in the sequence: present value (PV) -> simple interest (SI) -> simple future value (SFV). Pressing d cycles in the reverse direction. Press i to turn off trace. Press i again to return to the parameter input screen.
3. Compound Interest This calculator uses the following standard formulas to calculate compound interest.
PMT = – PV + FV n PV + FV n=– PMT • A deposit is indicated by a plus sign (+), while a withdrawal is indicated by a minus sign (–). uConverting between the nominal interest rate and effective interest rate The nominal interest rate (I% value input by user) is converted to an effective interest rate (I%') when the number of installments per year (P/Y) is different from the number of compound interest calculation periods (C/Y).
n .................................. number of compound periods I% ............................... annual interest rate PV ............................... present value (loan amount in case of loan; principal in case of savings) PMT ............................ payment for each installment (payment in case of loan; deposit in case of savings) FV ............................... future value (unpaid balance in case of loan; principal plus interest in case of savings) P/Y ..............................
•An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following function keys to maneuver between calculation result screens. • 1(REPT) .... Parameter input screen • 4(AMT) ...... Amortization screen • 6(GRPH) .... Draws graph After drawing a graph, you can press 1(TRACE) to turn on trace and read calculation results along the graph. Press i to turn off trace. Press i again to return to the parameter input screen.
4. Cash Flow (Investment Appraisal) This calculator uses the discounted cash flow (DCF) method to perform investment appraisal by totalling cash flow for a fixed period. This calculator can perform the following four types of investment appraisal. • Net present value (NPV) • Net future value (NFV) • Internal rate of return (IRR) • Pay back period (PBP) A cash flow diagram like the one shown below helps to visualize the movement of funds.
uPBP Initial value of N when NPV > 0. • Press 3 (CASH) from the Financial 1 screen to display the following input screen for Cash Flow. • 3(CASH) I% ............................... interest rate (%) Csh .............................. list for cash flow If you have not yet input data into a list, press 5('LIST) and input data into a list. After configuring the parameters, press one of the function keys noted below to perform the corresponding calculation. • 1(NPV) ........ Net present value • 2(IRR) ...
After drawing a graph, you can press 1 (TRACE) to turn on trace and read calculation results along the graph. Press i to turn off trace. Press i again to return to the parameter input screen.
5. Amortization This calculator can be used to calculate the principal and interest portion of a monthly installment, the remaining principal, and amount of principal and interest repaid up to any point.
The following calculation is performed after conversion from the nominal interest rate to the effective interest rate, and the result is used for all subsequent calculations. i = I%'÷100 Press 4(AMT) from the Financial 1 screen to display the following input screen for interest rate conversion. • 4(AMT) PM1 ............................. first installment of installments 1 through n PM2 ............................. second installment of installments 1 through n n ..................................
•An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following function keys to maneuver between calculation result screens. • 1(REPT) ..... Parameter input screen • 4(CMPD) .... Compound interest screen • 6(GRPH) ..... Draws graph After drawing a graph, you can press 1 (TRACE) to turn on trace and read calculation results along the graph. The first press of 1 (TRACE) displays INT and PRN when n = 1. Each press of e shows INT and PRN when n = 2, n = 3, and so on.
6. Interest Rate Conversion The procedures in this section described how to convert between the annual percentage rate and effective interest rate. uFormula n EFF = 1+ APR/100 –1 × 100 n APR = 1+ EFF 100 1 n APR : annual percentage rate (%) EFF : effective interest rate (%) n : number of compoundings –1 × n ×100 Press 5(CNVT) in the Financial 1 screen to display the following input screen for interest rate conversion. • 5(CNVT) n .......................................
7. Cost, Selling Price, Margin Cost, selling price, or margin can be calculated by inputting the other two values. uFormula CST = SEL 1– MRG 100 CST MRG 100 CST ×100 MRG(%) = 1– SEL SEL = CST : cost SEL : selling price MRG : margin 1– Press 1(COST) from the Financial 2 screen to display the following input screen. • 6(g)1(COST) Cst ............................... cost Sel ............................... selling price Mrg ..............................
8. Day/Date Calculations You can calculate the number of days between two dates, or you can determine what date comes a specific number of days before or after another date. Press 2(DAYS) from the Financial 2 screen to display the following input screen for day/date calculation. • 6(g)2(DAYS) d1 ................................ date 1 d2 ................................ date 2 D .................................
• 1(PRD) ...... Number of days from d1 to d2 (d2 – d1) • 2(d1+D) ..... d1 plus a number of days (d1 + D) • 3(d1 – D) ... d1 minus a number of days (d1 – D) •An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following function key to maneuver between calculation result screens. • 1(REPT) .... Parameter input screen 360-day Date Mode Calculations The following describes how calculations are processed when 360 is specified for the Date Mode item in the SET UP screen.
9. Depreciation Any of the following four methods can be used to calculated depreciation. uStraight-Line Method The straight-line method calculates depreciation for a given period.
uSum-of-the-Year's Digits Method The sum-of-the-year's-digits method calculates depreciation for a given period.
Press 3(DEPR) from the Financial 2 screen to display the following input screen for depreciation. Depreciation for an item acquired part way through a year can be calculated by month. • 6(g)3(DEP) n .................................. I% ............................... PV ............................... FV ............................... j ................................... Y–1 ..............................
The following function keys are on the calculation result table screen. • 1(REPT) .... Parameter input screen • 6(GRPH) .... Draws graph After drawing a graph, you can press 1 (TRACE) to turn on trace and read calculation results along the graph. Press i to turn off trace. Press i again to return to the parameter input screen.
10. Bonds The bond calculation function calculates the price and yield of a bond.
Press 4(BOND) from the Financial 2 screen to display the following input screen for band calculation. • 6(g)4(BOND) d1 ................................ purchase date d2 ................................ redemption date RDV ............................ redemption price or call price per $100 of face value CPN ............................ annual coupon rate (%) PRC ............................ price per $100 of face value YLD .............................
•An error (Ma ERROR) occurs if parameters are not configured correctly. Use the following functions key to maneuver between calculation result screens. • 1(REPT) ... Parameter input screen • 5(MEMO) ... Screen of various bond calculation values* • 6(GRPH) ... Draws Graph Pressing5 (MEMO) displays various bond calculation values, like those shown here. *The interest payment date is calculated from d2 when 365 is specified for the Date Mode item in the SET UP screen.
11. TVM Graph The TVM Graph lets you assign two of the five parameters (n, I%, PV, PMT, FV) to the x-axis and y-axis of a graph, and plot changes in y as the value of x changes. Press 5(TVM) from the Financial 2 screen to display the following input screen for TVM Graph. • 6(g)5(TVM) After configuring the parameters, press the function keys noted below to assign parameters to the x-axis and y-axis. • 1(X) ... Assigns highlighted parameter to the x-axis • 2(Y) ...
