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Using the Hewlett Packard 10BII calculator

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This presentation will show you how to use the hp 10BII ... Push the 'ON' key at the bottom left. I/YR. hp 10BII. N. PV. PMT. FV. C. ON. 7. 6. 5. 4. 9. 8. 1 ... – PowerPoint PPT presentation

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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
26
The Time Value of Money
27
  • Future Value

28
Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 1 year?
29
Future 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
30
Future 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

31
Future 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
42
Future Value - single sumsIf you deposit 100
in an account earning 6, how much would you have
in the account after 5 years?
43
Future 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
44
Future 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

45
Future 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
56
Future 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?
57
Future 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 ?
58
Future 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

59
Future 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
72
Future 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?
73
Future 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 ?
74
Future 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

75
Future 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.

77
Future Value - continuous compoundingWhat is the
FV of 1,000 earning 8 with continuous
compounding, after 100 years?
78
Future Value - continuous compoundingWhat is the
FV of 1,000 earning 8 with continuous
compounding, after 100 years?
PV FV
0 ?
79
Future 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

80
Future 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
  • Present Value

85
Present Value - single sumsIf you receive 100
one year from now, what is the PV of that 100 if
your opportunity cost is 6?
86
Present 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 ?
87
Present 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

88
Present 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
100
Present Value - single sumsIf you receive 100
5 years from now, what is the PV of that 100 if
your opportunity cost is 6?
101
Present 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 ?
102
Present 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

103
Present 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.

105
Present Value - single sumsWhat is the PV of
1,000 to be received 15 years from now if your
opportunity cost is 7?
106
Present Value - single sumsWhat is the PV of
1,000 to be received 15 years from now if your
opportunity cost is 7?
107
Present 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

108
Present 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
119
Present 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?
120
Present 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?
121
Present 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
132
Present 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?
133
Present 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

134
Present 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
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