Title: Using the Hewlett Packard 10BII calculator
1- Using the Hewlett Packard 10BII calculator
- This presentation will show you how to use the hp
10BII calculator and will introduce you to basic
time value of money problems.
2- Important keys for time value problems
3- Important keys for time value problems.
- N number of compounding periods.
4- Important keys for time value problems.
- N number of compounding periods.
- N can mean years, months, weeks, days, etc. as
you will soon see.
5- Important keys for time value problems.
- I/YR Interest rate per year.
6- Important keys for time value problems.
- PV Present Value.
7- Important keys for time value problems.
- PMT Payment.
8- Important keys for time value problems.
- FV Future value.
9- Turn it on
- Push the ON key at the bottom left.
10- Turn it on
- Push the ON key at the bottom left.
11- Check compounding
- Push the shift key once.
12- Check compounding
- Push the shift key once.
13- Check compounding
- Push the shift key once.
- Hold down the clear key C.
14- Check compounding
- Push the shift key once.
- Hold down the clear key C.
15- Check compounding
- Push the shift key once.
- Hold down the clear key C.
- The default is 12 periods per year (monthly
compounding).
16- Check compounding
- Push the shift key once.
- Hold down the clear key C.
- The default is 12 periods per year (monthly
compounding).
12 P_Yr
17- Change compounding
- Lets change to annual compounding (1
period per year).
12 P_Yr
18- Change compounding
- Type 1.
1
19- Change compounding
- Type 1.
- Push the shift key.
1
20- Change compounding
- Type 1.
- Push the shift key.
- Push PMT.
1
21- Change compounding
- Type 1.
- Push the shift key.
- Push PMT.
- This changes P/YR, periods per year, which is
printed in yellow on the PMT key.
1.0000
22- Change compounding
- Now, shift and clear to be sure it worked.
23- Change compounding
- Now, shift and clear to be sure it worked.
- You should have 1 period per year on your
screen. - You are set for annual compounding.
1 P_Yr
24- Note about compounding
- If P/YR 1, N will be years.
- If P/YR 2, N will be half years.
- If P/Y 4, N will be quarter years.
- If P/YR 12, N will be months.
- If P/YR 365, N will be days.
1 P_Yr
25- Following are step-by-step solutions to the TVM
problem set . - The following slides will assist you with these
problems.
3403
26The Time Value of Money
27 28Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 1 year?
29Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 1 year?
PV FV
0 1
30Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 1 year?
PV -100 FV
0 1
- Calculator Solution
- P/Y 1 I 6
- N 1 PV -100
- FV 106
31Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 1 year?
PV -100 FV 106
0 1
- Calculator Solution
- P/Y 1 I 6
- N 1 PV -100
- FV 106
32- How to do this
- Shift and clear.
33- How to do this
- Shift and clear.
34- How to do this
- Shift and clear.
- Compounding should be set for 1 period per year.
1 P_Yr
35- How to do this
- Enter the other numbers in any order.
36- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
37- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
38- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
6
39- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 1 and push N.
1
40- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 1 and push N.
- Push FV to solve.
41- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 1 and push N.
- Push FV to solve.
106
42Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 5 years?
43Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 5 years?
PV FV
0 5
44Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 5 years?
PV -100 FV
0 5
- Calculator Solution
- P/Y 1 I 6
- N 5 PV -100
- FV 133.82
45Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 5 years?
PV -100 FV 133.82
0 5
- Calculator Solution
- P/Y 1 I 6
- N 5 PV -100
- FV 133.82
46- How to do this
- Shift and clear.
47- How to do this
- Shift and clear.
48- How to do this
- Shift and clear.
- Compounding should be set for 1 period per year.
1 P_Yr
49- How to do this
- Enter the other numbers in any order.
50- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
51- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
52- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
6
53- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 5 and push N.
5
54- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 5 and push N.
- Push FV to solve.
55- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 5 and push N.
- Push FV to solve.
133.82
56Future Value - single sumsIf you deposit 100 in
an account earning 6 with quarterly compounding,
how much would you have in the account after 5
years?
57Future Value - single sumsIf you deposit 100 in
an account earning 6 with quarterly compounding,
how much would you have in the account after 5
years?
PV FV
0 ?
58Future Value - single sumsIf you deposit 100 in
an account earning 6 with quarterly compounding,
how much would you have in the account after 5
years?
PV -100 FV
0 20
- Calculator Solution
- P/Y 4 I 6
- N 20 PV -100
- FV 134.68
59Future Value - single sumsIf you deposit 100 in
an account earning 6 with quarterly compounding,
how much would you have in the account after 5
years?
PV -100 FV 134.68
0 20
- Calculator Solution
- P/Y 4 I 6
- N 20 PV -100
- FV 134.68
60- How to do this
- Shift and clear.
61- How to do this
- Shift and clear.
1 P_Yr
62- How to do this
- Shift and clear.
- Compounding should be set for 4 periods per year
(quarterly compounding).
1 P_Yr
63- How to do this
- Shift and clear.
- Compounding should be set for 4 periods per year
(quarterly compounding). - Type 4, push the shift key, and push PMT.
4
64- How to do this
- Shift and clear.
- Compounding should be set for 4 periods per year
(quarterly compounding). - Type 4, push the shift key, and push PMT.
- Shift and clear.
4 P_Yr
65- How to do this
- Enter the other numbers in any order.
66- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
67- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
68- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
6
69- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 20 and push N.
20
70- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 20 and push N.
- Push FV to solve.
71- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 6 and push I/YR.
- Type 20 and push N.
- Push FV to solve.
134.6855
72Future Value - single sumsIf you deposit 100 in
an account earning 6 with monthly compounding,
how much would you have in the account after 5
years?
73Future Value - single sumsIf you deposit 100 in
an account earning 6 with monthly compounding,
how much would you have in the account after 5
years?
PV FV
0 ?
74Future Value - single sumsIf you deposit 100 in
an account earning 6 with monthly compounding,
how much would you have in the account after 5
years?
PV -100 FV
0 60
- Calculator Solution
- P/Y 12 I 6
- N 60 PV -100
- FV 134.89
75Future Value - single sumsIf you deposit 100 in
an account earning 6 with monthly compounding,
how much would you have in the account after 5
years?
PV -100 FV 134.89
0 60
- Calculator Solution
- P/Y 12 I 6
- N 60 PV -100
- FV 134.89
76- How to do this
- This is the same as the previous problem, except
change P/YR to 12 for monthly compounding, and
enter 60 (months) for N.
77Future Value - continuous compoundingWhat is the
FV of 1,000 earning 8 with continuous
compounding, after 100 years?
78Future Value - continuous compoundingWhat is the
FV of 1,000 earning 8 with continuous
compounding, after 100 years?
PV FV
0 ?
79Future Value - continuous compoundingWhat is the
FV of 1,000 earning 8 with continuous
compounding, after 100 years?
PV -1000 FV
0 100
- Mathematical Solution
- FV PV (e in)
- FV 1000 (e .08x100) 1000 (e 8)
- FV 2,980,957.99
80Future Value - continuous compoundingWhat is the
FV of 1,000 earning 8 with continuous
compounding, after 100 years?
PV -1000 FV 2.98m
0 100
- Mathematical Solution
- FV PV (e in)
- FV 1000 (e .08x100) 1000 (e 8)
- FV 2,980,957.99
81- How to do this
- FV 1000 (ein)
- FV 1000 (e.08x100)
- Solve the exponent first
- Solve .08 x 100 8
82- How to do this
- FV 1000 (ein)
- FV 1000 (e.08x100)
- Solve the exponent first
- Solve .08 x 100 8
- Push shift and 1 to use the e function.
2,980.9580
83- How to do this
- FV 1000 (ein)
- FV 1000 (e.08x100)
- Solve the exponent first
- Solve .08 x 100 8
- Push shift and 1 to use the e function.
- Multiply by 1000.
2,980,957.9870
84 85Present Value - single sumsIf you receive 100
one year from now, what is the PV of that 100 if
your opportunity cost is 6?
86Present Value - single sumsIf you receive 100
one year from now, what is the PV of that 100 if
your opportunity cost is 6?
PV FV
0 ?
87Present Value - single sumsIf you receive 100
one year from now, what is the PV of that 100 if
your opportunity cost is 6?
0 1
- Calculator Solution
- P/Y 1 I 6
- N 1 FV 100
- PV -94.34
88Present Value - single sumsIf you receive 100
one year from now, what is the PV of that 100 if
your opportunity cost is 6?
- Calculator Solution
- P/Y 1 I 6
- N 1 FV 100
- PV -94.34
89- How to do this
- Shift and clear.
90- How to do this
- Shift and clear.
91- How to do this
- Shift and clear.
- Compounding should be set for 1 period per year.
1 P_Yr
92- How to do this
- Enter the other numbers in any order.
93- How to do this
- Enter the other numbers in any order.
- Type 100 and push FV.
100
94- How to do this
- Enter the other numbers in any order.
- Type 100 and push FV.
100
95- How to do this
- Enter the other numbers in any order.
- Type 100 and push FV.
- Type 6 and push I/YR.
6
96- How to do this
- Enter the other numbers in any order.
- Type 100 and push FV.
- Type 6 and push I/YR.
- Type 1 and push N.
1
97- How to do this
- Enter the other numbers in any order.
- Type 100 and push FV.
- Type 6 and push I/YR.
- Type 1 and push N.
- Push PV to solve.
98- How to do this
- Enter the other numbers in any order.
- Type 100 and push FV.
- Type 6 and push I/YR.
- Type 1 and push N.
- Push PV to solve.
-94.3396
99- Note
- This means that 100 promised in one year is
equivalent to 94.34 today. - Dont be misled by the minus sign on the screen.
The calculator is programmed to show cash
outflows as negative and cash inflows as positive.
-94.3396
100Present Value - single sumsIf you receive 100
5 years from now, what is the PV of that 100 if
your opportunity cost is 6?
101Present Value - single sumsIf you receive 100
5 years from now, what is the PV of that 100 if
your opportunity cost is 6?
PV FV
0 ?
102Present Value - single sumsIf you receive 100
5 years from now, what is the PV of that 100 if
your opportunity cost is 6?
- Calculator Solution
- P/Y 1 I 6
- N 5 FV 100
- PV -74.73
103Present Value - single sumsIf you receive 100
5 years from now, what is the PV of that 100 if
your opportunity cost is 6?
- Calculator Solution
- P/Y 1 I 6
- N 5 FV 100
- PV -74.73
104- How to do this
- This is the same as the previous problem, except
you should enter 5 for N, to reflect a five-year
time line.
105Present Value - single sumsWhat is the PV of
1,000 to be received 15 years from now if your
opportunity cost is 7?
106Present Value - single sumsWhat is the PV of
1,000 to be received 15 years from now if your
opportunity cost is 7?
107Present Value - single sumsWhat is the PV of
1,000 to be received 15 years from now if your
opportunity cost is 7?
- Calculator Solution
- P/Y 1 I 7
- N 15 FV 1,000
- PV -362.45
108Present Value - single sumsWhat is the PV of
1,000 to be received 15 years from now if your
opportunity cost is 7?
- Calculator Solution
- P/Y 1 I 7
- N 15 FV 1,000
- PV -362.45
109- How to do this
- Shift and clear.
110- How to do this
- Shift and clear.
111- How to do this
- Shift and clear.
- Compounding should be set for 1 period per year.
1 P_Yr
112- How to do this
- Enter the other numbers in any order.
113- How to do this
- Enter the other numbers in any order.
- Type 1000 and push FV.
1000
114- How to do this
- Enter the other numbers in any order.
- Type 1000 and push FV.
1000
115- How to do this
- Enter the other numbers in any order.
- Type 1000 and push FV.
- Type 7 and push I/YR.
7
116- How to do this
- Enter the other numbers in any order.
- Type 1000 and push FV.
- Type 7 and push I/YR.
- Type 15 and push N.
15
117- How to do this
- Enter the other numbers in any order.
- Type 1000 and push FV.
- Type 7 and push I/YR.
- Type 15 and push N.
- Push PV to solve.
118- How to do this
- Enter the other numbers in any order.
- Type 1000 and push FV.
- Type 7 and push I/YR.
- Type 15 and push N.
- Push PV to solve.
-362.446
119Present Value - single sumsIf you sold land for
11,933 that you bought 5 years ago for 5,000,
what is your annual rate of return?
120Present Value - single sumsIf you sold land for
11,933 that you bought 5 years ago for 5,000,
what is your annual rate of return?
121Present Value - single sumsIf you sold land for
11,933 that you bought 5 years ago for 5,000,
what is your annual rate of return?
- Calculator Solution
- P/Y 1 N 5
- PV -5,000 FV 11,933
- I 19
122- How to do this
- Shift and clear.
123- How to do this
- Shift and clear.
124- How to do this
- Shift and clear.
- Compounding should be set for 1 period per year.
1 P_Yr
125- How to do this
- Enter the other numbers in any order.
126- How to do this
- Enter the other numbers in any order.
- Type 5000, push /-, and push PV.
-5000
127- How to do this
- Enter the other numbers in any order.
- Type 5000, push /-, and push PV.
-5000
128- How to do this
- Enter the other numbers in any order.
- Type 5000, push /-, and push PV.
- Type 11933 and push FV.
11,933
129- How to do this
- Enter the other numbers in any order.
- Type 5000, push /-, and push PV.
- Type 11933 and push FV.
- Type 5 and push N.
5
130- How to do this
- Enter the other numbers in any order.
- Type 5000, push /-, and push PV.
- Type 11933 and push FV.
- Type 5 and push N.
- Push I/YR to solve.
131- How to do this
- Enter the other numbers in any order.
- Type 5000, push /-, and push PV.
- Type 11933 and push FV.
- Type 5 and push N.
- Push I/YR to solve.
19.0025
132Present Value - single sumsSuppose you placed
100 in an account that pays 9.6 interest,
compounded monthly. How long will it take for
your account to grow to 500?
133Present Value - single sumsSuppose you placed
100 in an account that pays 9.6 interest,
compounded monthly. How long will it take for
your account to grow to 500?
- Calculator Solution
- P/Y 12 FV 500
- I 9.6 PV -100
- N 202
134Present Value - single sumsSuppose you placed
100 in an account that pays 9.6 interest,
compounded monthly. How long will it take for
your account to grow to 500?
- Calculator Solution
- P/Y 12 FV 500
- I 9.6 PV -100
- N 202 months
135- How to do this
- Shift and clear.
136- How to do this
- Shift and clear.
137- How to do this
- Shift and clear.
- Compounding should be set for 12 periods per year.
12 P_Yr
138- How to do this
- Enter the other numbers in any order.
139- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
140- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
-100
141- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 500 and push FV.
500
142- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 500 and push FV.
- Type 9.6 and push I/YR.
9.6
143- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 500 and push FV.
- Type 9.6 and push I/YR.
- Push N to solve.
144- How to do this
- Enter the other numbers in any order.
- Type 100, push /-, and push PV.
- Type 500 and push FV.
- Type 9.6 and push I/YR.
- Push N to solve.
201.9834