BASICS. Access blue functions with [Shift up] Access orange functions with [Shift down]

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1 CALCULATOR COURSE

2 BASICS Most keys have three functions: Primary function printed in white Secondary function printed in orange Tertiary function printed in blue Access blue functions with [Shift up] Access orange functions with [Shift down]

3 SETTING UP THE CALCULATOR 1 2 DECIMALS To change number of decimals: 1. Press [Shift down] (Orange) 2. Press [DISPLAY] (=) 3. Enter a number between 0 and 9 Standard number of decimals is 4 DECIMAL SEPARATOR Default setup is American (One thousand = 1,000.00) Change to European setup (One thousand = 1.000,00) 1. Press [Shift down] (Orange) 2. Press [,/.] (.)

4 3 4 RAD/DEG Toggle between radians & degree angle measure mode: 1. Press [Shift up] (Blue) 2. Press [RAD/DEG] (+) When RAD is displayed, the calculator is set to radians Make sure RAD IS NOT displayed NUMBER OF PAYMENTS PER PERIOD To check your calculator setting: 1. Press [Shift down] (Orange) 2. Press [Clear all] (C) If you do not see 1 P_Yr, change the set up 1. Enter 1 2. Press [Shift down] (Orange) 3. Press [P/YR] (PMT) 4. Check setting

5 5 6 BEG/END When calculating annuities we pay/receive money at either the beginning or the end of a period. Standard setting is end of period To toggle between beginning and end of period payments/ receivments: 1. Press [Shift down] (Orange) 2. Press [BEG/END] (MAR) Make sure BEG IS NOT displayed ALGEBRAIC/CHAIN Default setting is Algebraic To change setting: 1. Press [Shift up] (Blue) 2. Press [Alg/Chain] (On/Off button) Make sure Algebraic is selected

6 STORING NUMBERS Using constants: Use [K] to store a number and operation Once the constant operation is stored, enter a number and press [=] Example: Store +2 as a constant by entering [+2], followed by [K] Store +10% as constant by entering [+10%], followed by [K]

7 USING THE M REGISTER Perform memory operations on a single storage register Store first number by pressing [ M] Add subsequent numbers by pressing [M+] (Add negative numbers to subtract) Recall the result by pressing [RM]

8 EXERCISE Use the M register to add 17, 14,25, and 16,95. Then subtract 4,65 and recall the result.

9 EXERCISE Use the M register to add 17, 14,25, and 16,95. Then subtract 4,65 and recall the result. 1. Enter 17, and press [ M] 2. Enter 14,25, and press [M+] 3. Enter 16,95, and press [M+] 4. Enter -4,65, and press [M+] 5. Recall result of 43,55 by pressing [RM]

10 USING NUMBERED REGISTERS To store first number: Enter the value you want to store, and press [Shift down] followed by [STO] Enter a number key from 0 to 9, or [.] followed by 0 to 9 to store into a numbered register (20 registers in total) To store subsequent numbers Enter the number, followed [Shift down] and [STO] Enter what operation you want (For example: [+], [-], [/], or [*]) Select the register you want to use To recall numbers press [RCL] followed by the register number in which you stored your data

11 NOW YOU TRY! Store 1,25 in register 5 Enter 1,25 Press [Shift down], followed by [STO] and [5] Add 3 to register 5 Enter 3 Press [Shift down], followed by [STO], then [+], and [5] Recall register 5 Press [RCL], followed by [5], to get a value of 4,25

12 TIME VALUE OF MONEY (TVM) Positive values represents money received, negative values represents money paid out Enter any four values to calculate the fifth PV = Present value FV = Future value I/YR = Interest rate per year N = Number of years PMT = Yearly payment

13 EXERCISES 1. You make a deposit of NOK today. If you leave it in the bank for 5 years at an interest rate of 2%, what will your money have grown to? Answer: ,30 NOK 2. Two years ago, you made a deposit of NOK. Today, your balance is ,53. What interest rate did you receive? Answer: 3,84 % 3. You open a bank account today, and make a deposit of NOK every year for 8 years. What is your balance after eight years if the rate of return is 2% and you never withdrew any money? Answer: ,54 NOK

14 EXERCISE #3 Enter 0, and press [PV] Enter 8 years, and press [N] Enter 2, and press [I/YR] Enter , and press [PMT] Press [FV] to find future value FV = ,54

15 CASH FLOW Cash flow application is used when cash flows occur over regular intervals. CF = Cash flow CF0 = Initial investment (negative number) CF1, CF2,, CFn = Cash flow for that year

16 ENTERING A CASH FLOW 1. Clear cash flow memory ( Press [Shift down], and then [Clear All]) 2. Enter value of initial investment, and press [CFj] 3. Enter cash flow for the following year, and press [CFj] 4. Repeat step 3 for all cash flows

17 ENTER CASH FLOW Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year

18 ENTER CASH FLOW Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year Enter , and press [CFj] Enter 400, and press [CFj] Enter 550, and press [CFj] Enter 300, and press [CFj] Enter 250, and press [CFj] Enter 250, and press [CFj]

19 REPEAT VALUES Repeat value refers to the frequency of a cash flow (i.e. how many times that cash flow occurs) Standard setting is 1, which means that each cash flow occurs only once To change the frequency: 1. Fill in cash flow as usual (Enter value, and press [CFj]) 2. Enter the amount of times this cash flow occurs (for example 3 times) 3. Press [Shift down], and then [Nj]

20 ENTER CASH FLOW Initial investment Cash flow year 1, 2, & 3 Cash flow year 4, &

21 ENTER CASH FLOW Initial investment Cash flow year 1, 2, & 3 Cash flow year 4, & Enter , and press [CFj] 2. Enter 400, and press [CFj] 3. Enter 3, press [Shift down], and then [Nj] 4. Enter 200, and press [CFj] 5. Enter 2, press [Shift down], and then [Nj]

22 NET PRESENT VALUE The present value of future net cash flows 1. Enter cash flow for all years 2. Enter discount rate, and press [I/YR] (Enter 5% as 5, not 0,05) 3. Press [Shift down], and then [NPV]

23 EXERCISE You are offered a choice between two investments. You can only choose one. Given the cash flows and a discount rate of 3%, which yields the highest net present value (and should be chosen)? Investment A Initial investment Year 1, 2, & 3 Year 4 & Investment B Initial investment Year 1 Year

24 EXERCISE Investment A Initial investment Year 1, 2, & 3 Year 4 & 5 Investment B Initial investment Year 1 Year Net present value 481,66 1. We have already entered this cash flow 2. Enter 3, and press [I/YR] 3. Press [Shift down], and press [NPV] Net present value 316, Enter , and press [CFj] Enter 900, and press [CFj] Enter 1.000, and press [CFj] Enter 3, and press [I/YR] Press [Shift down], and press [NPV]

25 INTERNAL RATE OF RETURN The discount rate that yields a net present value of zero 1. Enter cash flow for all years 2. Press [Shift down], and then [IRR/YR] Investment A Initial investment Year 1, 2, & 3 Year 4 & Investment B Initial investment Year 1 Year

26 Investment A Initial investment Year 1, 2, & 3 Year 4 & 5 Investment B Initial investment Year 1 Year Internal Rate of Return 16,99% Internal Rate of Return 21,00% Enter , and press [CFj] Enter 400, and press [CFj] Enter 3, press [Shift down], and then [Nj] Enter 200, and press [CFj] Enter 2, press [Shift down], and then [Nj] Press [Shift down], and then [IRR/YR] Enter , and press [CFj] Enter 900, and press [CFj] Enter 1.000, and press [CFj] Press [Shift down], and then [IRR/YR]

27 ANY QUESTIONS?

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