CALCULATOR COURSE
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]
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 [,/.] (.)
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 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
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]
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]
EXERCISE Use the M register to add 17, 14,25, and 16,95. Then subtract 4,65 and recall the result.
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]
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
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
TIME VALUE OF MONEY (TVM) Positive values represents money received, negative values represents money paid out Enter any four values to calculate the fifth 1. 2. 3. 4. 5. PV = Present value FV = Future value I/YR = Interest rate per year N = Number of years PMT = Yearly payment
EXERCISES 1. You make a deposit of 24.849 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: 27.435,30 NOK 2. Two years ago, you made a deposit of 42.000 NOK. Today, your balance is 45.287,53. What interest rate did you receive? Answer: 3,84 % 3. You open a bank account today, and make a deposit of 15.000 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: 128.744,54 NOK
EXERCISE #3 Enter 0, and press [PV] Enter 8 years, and press [N] Enter 2, and press [I/YR] Enter -15.000, and press [PMT] Press [FV] to find future value FV = 128.744,54
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
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
ENTER CASH FLOW Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5-1.000 400 550 300 250 250
ENTER CASH FLOW Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5-1.000 400 550 300 250 250 1. 2. 3. 4. 5. 6. Enter -1.000, 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]
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]
ENTER CASH FLOW Initial investment Cash flow year 1, 2, & 3 Cash flow year 4, & 5-1.000 400 200
ENTER CASH FLOW Initial investment Cash flow year 1, 2, & 3 Cash flow year 4, & 5-1.000 400 200 1. Enter -1.000, 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]
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]
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 & 5-1.000 400 200 Investment B Initial investment Year 1 Year 2-1.500 900 1.000
EXERCISE Investment A Initial investment Year 1, 2, & 3 Year 4 & 5 Investment B Initial investment Year 1 Year 2-1.000 400 200 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] -1.500 900 1.000 Net present value 316,38 1. 2. 3. 4. 5. Enter -1.500, 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]
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 & 5-1.000 400 200 Investment B Initial investment Year 1 Year 2-1.500 900 1.000
Investment A Initial investment Year 1, 2, & 3 Year 4 & 5 Investment B Initial investment Year 1 Year 2-1.000 400 200 Internal Rate of Return 16,99% Internal Rate of Return 21,00% 1. 2. 3. 4. 5. 6. Enter -1.000, 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] -1.500 900 1.000 1. 2. 3. 4. Enter -1.500, and press [CFj] Enter 900, and press [CFj] Enter 1.000, and press [CFj] Press [Shift down], and then [IRR/YR]
ANY QUESTIONS?