VI
OF
S am am u
A L U LA L A TO TO R
B r v e m an an , U n
UN
ON
To on
T h n ot ot e p re re se se n e vi vi e o f c a c u a to to r i na na nc nc ia ia l u nc nc t o n o r h e T ex ex a ns um nt BA P LU L U S c a c u a to to r T h n o n c u d n g n um um be be r o f h e x am am p e s u s a s u s a t o n e p n t w i p e m is is s o n o m h e 3r Ma ma me Br ma Al mp OA CA ma calculator. d e a i e d g u d eb eb oo oo k o r h e o p o n o f a n u nc nc t o n a va va i a b o n h e B A P LU LU S ou wi http http:/ ://e /educ ducat atio ion. n.ti ti.c .com/u om/us/ s/glo global ballg lgui uides des.h .html tml#fi #finan nance. ce. It wil be assumed assumed h a y o h av av e a va va i a b a n h av av e v ie ie we we d h e a pp pp ro ro p g u d e b oo oo k o r h e c a c u a to to r h a y o a r u si si ng ng . wi
we Ma
c ttuu a
d i p la la y
ma
me
Cr
h e c a c u o r d is is p a y
wi me wi s eq eq ue ue nc nc e s ta ta r w i c le le a r eg eg is is te te rs rs . C a lc lc u a to to r r eg eg is is te te r a r c le le a e d w i t h k ey ey st st ro ro k s eq eq u en en ce ce s CL
WOR
CE/C an
1 2n 2n dl dl lC lC L R T V M l lc lc E /c /c l wi de ma
me T he he s a r
he de au MA
US se ng
or he ca cu
ma
or bu he ca be
k ey ey s o k s eq eq ue ue nc nc e 1 2n 2n d I FO FO R M A T I A l h ou ou g t h n um um b e o f d ec ec im im a l mp wi d o a r a m ou ou n a r w r e n a s o un un de de d t h n ea ea re re s . 0 1 .
MO
Wh a lg lg eb eb ra ra i o rd rd e o f o pe pe ra ra t o n
n o r es es pe pe c e d F o
2x
mo n st st an an ce ce , h e k ey ey s r ok ok e
we
mu Wh AO mo e su su l o f h e k ey ey st st ro ro k s eq eq ue ue nc nc e a bo bo v w i b e 7 . T h u e b ec ec au au s he h ie ie ra ra rc rc h o f a lg lg eb eb ra ra i o pe pe ra ra titi on on s m u lt lt ip ip lili ca ca titi o i s d on on e b ef ef or or e a dd dd itit io io n s o wh Th s el el ec ec te te d i n t h " FO FO R M A T " w o rk rk sh sh ee ee t
mo
A CC C C UM U M U LA LA T E A N P RE RE SE SE N V AL A L UE UE S O F US NG C OM O M PO P O UN U N D N TE TE RE RE S R AT AT E
S IN IN GL G L E P AY A Y M EN EN T
A cc c c um um u e d v a u e a n p re re se se n v a u e o f n g p ay ay m n t u s n g a nn nn ua ua l mo mi u si si n t h c al al cu cu la la to to r f un un ct ct io io n a s d es es cr cr ib ib e b el el ow ow .
A C C U M UL U L A TE TE D V A L U E We
Ex mp
1. ma
us
hi me
un on ws
Th
%.
wo wa We wi
h e o l o w n g k ey ey s o ke ke s
0I
1.09
The screen screen should should displ display ay 1,295. 1,295.029 029.In .In this this funct functio ion, n, y=I.09 an We
me NI
mo
x=3.
T VM VM ) 1 c om om p
1 2n 2n d ilil Q U IT IT I ( th th i r et et ur ur n c al al cu cu la la to to r t o s ta ta nd nd ar ar dd- ca ca lc lc ul ul at at o m o de de )
MO
Wh a lg lg eb eb ra ra i o rd rd e o f o pe pe ra ra t o n
n o r es es pe pe c e d F o
2x
mo n st st an an ce ce , h e k ey ey s r ok ok e
we
mu Wh AO mo e su su l o f h e k ey ey st st ro ro k s eq eq ue ue nc nc e a bo bo v w i b e 7 . T h u e b ec ec au au s he h ie ie ra ra rc rc h o f a lg lg eb eb ra ra i o pe pe ra ra titi on on s m u lt lt ip ip lili ca ca titi o i s d on on e b ef ef or or e a dd dd itit io io n s o wh Th s el el ec ec te te d i n t h " FO FO R M A T " w o rk rk sh sh ee ee t
mo
A CC C C UM U M U LA LA T E A N P RE RE SE SE N V AL A L UE UE S O F US NG C OM O M PO P O UN U N D N TE TE RE RE S R AT AT E
S IN IN GL G L E P AY A Y M EN EN T
A cc c c um um u e d v a u e a n p re re se se n v a u e o f n g p ay ay m n t u s n g a nn nn ua ua l mo mi u si si n t h c al al cu cu la la to to r f un un ct ct io io n a s d es es cr cr ib ib e b el el ow ow .
A C C U M UL U L A TE TE D V A L U E We
Ex mp
1. ma
us
hi me
un on ws
Th
%.
wo wa We wi
h e o l o w n g k ey ey s o ke ke s
0I
1.09
The screen screen should should displ display ay 1,295. 1,295.029 029.In .In this this funct functio ion, n, y=I.09 an We
me NI
mo
x=3.
T VM VM ) 1 c om om p
1 2n 2n d ilil Q U IT IT I ( th th i r et et ur ur n c al al cu cu la la to to r t o s ta ta nd nd ar ar dd- ca ca lc lc ul ul at at o m o de de )
wl
%) mb
I.HJ
C P TI TI IF IF V I ( th th i c om om p u e s h e a cc cc um um u la la te te d v a u e a ls ls o c a l e value). T h e s cr cr ee ee n s ho ho ul ul d d is is pl pl a - 1, 1, 29 29 5. 5. 02 02 9 Th
w)
FV
mo
BA P R ES ES E N
mo
mu
w)
P LU LU S
V A L UE UE :
We us Ex mp
5(
1,000,000i5
us
hi
un on
1,000, 000(1.195f25 000(1.195f25
11,635.96. wo wa
Z]
1g
GJ 1000000
b e r ep ep la la ce ce d b y
1.195 1.195 11/x[ x[ !Z Us
me
G J 1 00 00 00 00 00 00 g mo
NI 100000 100000
NT R!
we QU
IFVI19. IFVI19.5I 5IWI WI
25 I.HJ I.HJ ICPTllp ICPTllpvl vl Th n eg eg at at iv iv e v al al u a pp pp lili e h er er e) e) . As
mo
g en en e a l p ro ro c d u e ,
mme h e q ua ua t o n ( PV PV ) I +
=FV 41
us ng he CPT
u nc nc t o n
u tu tu r
U N K N O W N I N TE R E S R A T E : As
x am p
An ni
or he nt
ve me
we
5 ,0 0
ns de Ex mp
nu
1 .5 (
nt
g ro w
25,000(1+i)25
ge
i=(40)1/25
ul or 40 I.2J .0
ow
un on wi
[;]g
[;],
w in g
h e s c e n s ho u
ys ok d is p a y 0 .1 58 99 72 34 .
U s in g f in an ci a f un ct io n s t h k ey st ro k s eq ue nc e s ol vi n f o NI 2 50 0
QU
P V l 0 00 00 0
T h s cr ee n s ho u
U NK NO W
is
1+
FV
d is pl a 1 5 8 99 72 34 4 ( th i
he
m e as u e )
T IM E P ER IO D
A s a n e xa m pl e o f s ol v n g f o a n u nk no w n m e p e o d s up po s h a a n n i a l n ve s m e n o f 1 0 a t m o n h l c om p ou n r a o f n te re s ws mon hs at mon hl wh
we
n te re s r a
i=.75%. Then 100(1.0075t mo
Inl~~75
c al cu la to r I LN I f un ct io n U s in g f in an ci a f un ct io n s t h k ey st ro k s eq ue nc e s ol vi n f o
N\ 10
pv 30 1+
is
QU FVI
Nl T h c re e h ou l d is p a y 1 47 .0 30 26 . S l g h m o h a 1 4 m on th s o f c om po un d n g w i b e e qu i e d T h c a c u a to r e tu rn s v a u e o f based mp 147.0302 means that 100(1.0075)14703026 300.
MU
ME MP
g is te r
Pr
be or
s ta r n g h e k ey s o k
Va
Us
C om p
discount8% is 500(1-.08)
s eq ue nc e
Di
Ra
500(.92)8
256.61.
Th
wa
1 . W e u s s ta nd a h me t o pe ra to r w i t t h f ol lo w in g k ey st ro ke s .9 Th
s ta nd a
c a c u a to r m od e
50
!Z
h ou l
I8
pl
56 1.
[!ZY]
1+/-llliJIENTERljCPTllpvl T h s c e e s ho u
d is pl a
2 56 .6 1
T h c al cu la to r h a c a c u a te d
-500(1-.0Sr(-8)
-FV(1+I)-N
m em b
-500(.92)8
-256.61. me
wi
3 . 5 00 j v l + / w l lliJICPTI!FVI W e h av e c a c u a te d
5 00 (1 - 0 8
-256.61.
Ac mu
Va
%. Th
mu
Us
C om p
ma
me
Di
Ra
ws
25(1-.06)-5
01)
We me t h f ol lo w in g k ey st ro ke s
mo
wi
25
1+/-llliJlcPTIIFVI T h s c e n s ho u d is p a y 3 4 0 6 n eg a v e s i d ic a n g o u o w A s h i a p o ac h w e o u a l n d h e e f e c v e a nn ua l n te re s an accumulate.
WE
Th
o m n a a nn ua l n t
MI
st
c om p u nd e
me
calculator functions as illustrate below. N om in a
n te re s
Ra
mi
%) '(12)
T h e r el at io n sh i
ca be
un
mp
mo .2682 (26.82%)
12
"1 he
w in g w a u s n g h e ICONV function.
Co
mi
We
wi 2n
C ON V
N OM =
pp
s)
(CIY= appears)
ENTER (the nominalrate) n um b
121ENTER
m po un d n g
p e o ds )
We 12
u iv a n t
ve
mi
n nu a
st
Co
2 6 8 2% .
mi
12ndilICONVI
il
26.82IENTER!
il (CIY= appears)
E NT ER !
(EFF= appears)
N OM =
ICPTI Th e e h ou l d i p la y 2 3 9 96 6 o un d 2 4 W e h av e c on ve r e d h e e f e c v e a nn ua l n te re s of 26 82 ke 26 82 h e e qu iv a e n n om in a a nn ua l i n e re s a t c om p ou nd e m o n h l k e 1 2 o f2 4% .
N om in a
Di
un
Ra
mi c a c u a to r
mi e qu iv a e n relationship
mp u nc t o n
u s a te d b e o w
%) mp a n e f e c i v a nn ua l a t o f n te re s o f . 09 5 ( 9. 53 % ) T h e d~4)
o un d i n h e f o o w in g w ay s
Us
PN mb
E NT ER I
QU TI
Th
mp
mp e n e r n g h e n um b e o f c om p ou nd in g p er io d i n h e y ea r We n d h e e qu iv a n t e f c t v e a nn ua l a t o f n te re s g iv e n om in a a nn ua l a t o f d is co un t 4 1+ /
[fY]
E J 9 1+ / w l
om he
ICPTIIFVI
T h d i p la y s ho u e a 1 .0 95 3 w e n te rp re t h i a s n d c a n g h a h e e f e c v e a nn ua l a t o f n te re s 9 .5 3% . W e h av e c a c u a te d 1+
where
1+
-N
wa
-.09
wi
1 .0 95 3 function,
wa
wi
d=9%) wasenteredwith91+/-llwl.
We mi g iv e e ff ec ti v a nn ua l r at e o f i nt er es t 4 1+ /- 1 E J K e y Ke
Ke
ua
1 .0 95 3 + /- I F V I C PT I N I
Th n om in a a nn ua l a t o f d is co un t c om po un de d
m e p e y ea r
L E VE L P A Y M EN T A N N U IT Y V A L VA n O
Th mu me mm Cl r eg is te r b ef o s ta r n g h e k ey s r ok e s eq ue nc e T h c a c u a to r s ho u i n s ta nd ar d c al cu la to r m o de .
be
A cc um u la te d
V a u e o f A nn u v - m m e d a te :
20th
me 1000s2O].o4
u si n
1 00 0 (1.~~:O-l
t h c al cu la to r
Us
PN
E NT ER I
Q U IT !
mb mp s ta nd a c a c u a t o n u nc t o ns ) m p or ta n d o h i s te p h e c om p ou nd in g p e o d c o e sp on d h e p ay m en t p e o d RJ
NI
PV OO
P re se n
mu
V a u e o f A nn u y -I m me d a te :
Ow mp
%.
S O ~ .O O 7 5 = S O [1 ;~ ~ 5 J =3 ,9 47 .0 8 10 ye
1 2 m o n h s e r y ea r
me mo
We
NI NT RI IFVllcPTllpvl Th th annuity
st so ha
P MT ! P T F V
Th annuity value.
wi
M T E NT ER I
hi
10
h e g en e a l
P M T . am
q ua t o n f o a n a nn u y - m m ed i
me equation
SNji
FV
PV
F in d n 2 h e P ay me n A m ou n
mp
mo %.
mo Ka361
alOOO
005'
me
me
30.42.
'361.005
Th
wi
MT T h d is pl a s ho u F in d n 2
r ea d 3 0 4 2 Ra 35ll36Ji'
br
36
o lu t o n
1 00 0 1 +
i. T h
wi
pv 35 PMT
i.
FV
PT wl
%) month.
F in d in 2 t h N u m be r o fP av m en ts :
W e w i u s E xa mp l 2 .1 3 mb mu me
nominal annual rate i(2)
m on t
We wi
u s a t h e a lc u a to r u nc t o n o r n d n g me mp mi mi
.08, with interestcreditedsemiannually. or
10
5 0 . snJ.04
11
wi
Th
mo mu u s a f e r t h 14th d ep os i i s 50,si4L04= 91 4 6 0
d ep os i
14th
n.
me
mu
mu
50 Si4l04
mo
me
xt
nc
ns
b r n g h e o ta l
si4L04
1 00 0 Th
14thd ep os i
a n a dd i o na l
vi we
mu
nd
va ue of
nu
du
Annuitv-Due: T h c cu mu la te d v a u e a n p r s en t v a u e o f e ve l p ay m n t a nn u y -d u c a b e o un d u s n g c a c u a to r f un ct io ns . T h s am e m e th od s a pp l t ha t w e r mm wi me B GN I mak wh
S ET I
QU TI
mu
h e c a c u a to r v ie w p ay m en t a s b e n g m a d a t h e b eg in n n g o f e ac h BG mo wh BG mo ND mo
2 nd II BG N I1 2n dI IS E T 1 2n d Q U IT I
a n B G N s ho u
d is ap pe a
ro
ND mo PMT. i:i:vJi' 4th. I n h e e qu a o n
we
md
PMT. sm
ar entered,
4t a s b e o re , P M T a n P V o r F V a r o pp os i
me We an us
we
Am
Ba
s ig ns )
me
h e c a c u o r u nc t o n n d h e b a o o p ay me n e qu i e d wh me wi n a b a o o p ay me n E xa mp l 2 .1 5 a ) o f C ha p 2 , o a o f5 00 0 be ng ep b y m on th l p ay me n o f 1 0 e ac h s ta r n g o n m on t a f ma &a
12
;(12)
09 we ar
n d h e n um b e o f u l p ay m en ts t ha t a r mo
me We mb f o o w in g k ey s o ke s t h c a c u a to r s ho u
me E N D m o de )
be
e qu i e d me
wi
PV OO +/ MT Yl PT T h d is p a y h ou l e a 6 2 9 . T h n d c a e s h a h e 62ndp a m e q u e no ug h e pa y h e o an . T h a dd i o na l p ay me n n e d ed , s a at me o un d o m h e e la t o ns h 62nd e gu la r p ay m en t o f 1 0 5000(1.0075)62 -100,s621.0075
p ro du c
he va ue of
5 00 0 p v O O 1 + T h d is p a y s ho u
wi
ar
pMT ea
75 NI 62
c PT I F V I
89 55
WH
ME
wh wi
me i ll us tr at e t h u s o f t hi s c al cu la to r f un ct io n An
mme mi v a u e o n y ea r b e o r
10an
me mp p ay me n
he
1 .0 2
mp
wi aiO!j' where
8 24 3
h e e f e c v e a nn ua l r at e o f n te re s h a
e qu iv al en t
awJ.082432
63 wi
h e n om in a Th
ui wi
sequence of keystrokes E NT ER ! hi ENTER year) 12ndIIQUITI.
il
me se
CN=4
n te re s c on ve r o n p e o d
pe
13
10 ll
( 1 a nn ua l p ay m en ts )
II (nominalannualinterestrate of 8%), 1+/-llpMTllcPTllpvl Th di
7,
mu
followingkeystrokes: T h d is p a y s ho u No
10 ll
y. To
Ipvl!cPTllFvl
r ea d 1 4 6 55 , t h a cc um u la te d v a u e o f h e a nn u t y
we nd we
setting
he nn
va (C
ws wi an ar
( 1 a nn ua l p ay m en ts )
8 .2 43 2
l Y (effective annual interest rate),
1+/-llpMTllcPTllpvl
mm
mo
mo
me
a60lj
5 1 9 24 . T h a nn u
sequence of keystrokes /2ndl [ f Z Y ]
ENTER
hi
e t 1 2 p ay m en t p e y ea r
ENTER (thi set CN=I i nt er es t c on ve rs io n p er io d p e y ea r) , then 12ndIIQUlTI
il
NI
5x 2=
mo
(effectiv annual interest rate),
1+/-llpMTllcPTllpvl
me
14
As wi Ca o n h e o ne -m o n be se be or 60
we e ff ec t v e n te re s r at e o f 0 04 86 8 h e o l o w in g k ey s o ke s
4 86 8
an
should
a cc um u a te d
va ue
N I m on th l e f c t v e n te re s a te )
1+/-llpMTllcPTllpvl Th
VA UA ON OF NC
AS NG AN
D E R EA S N G
(Ia}ii'li
A NN U
(Ds}iili
we (Is)nri
Th
w in g
Finding
wo
(Ia)nri
(1
it
an
x am p
(Da)nri
vn
(Ds)nri
m e h od .
(Ia)1i1i
..
(Ia)Wl.os
amos-
20 20
.0
We
n um e ra to r w i t t h f ol lo w in g k ey st ro ke s 12ndllBGNI12ndiiSETI12ndliQUITI MT wh
aWl.os-
we
aWl.os-
20v20
No 1 g
MTI
me
I)
1 26 . T h n , (I )Wl.os= 6'~0182
+/ +/
(I
20v20
MT
we FV
we
78.908.
15
we
(Is)-,., ni
n um e ra to r o f (Is)-,. is s-,.
n, w e
s-,. f ir st , t he n s ub tr ac t n,
i.
(Ds)nJi
Finding
(Ds)m04
me
mo
35(1.04i5 -sm04
.0
We
E ND .
w l E NT ER I
+/
P M T I C P T II FV I wh
sm04.
we
me
PV mu 35(1.04)35 -s351.04
64.4609 (lFVI)
Then, (Ds)35104 No
64.4609 .0
1,611.52.
we .0
1+
gin
mi p ay m en t a m ou nt s wo
ws
ns ea of
MT
me
wa
pv
dof
MT
CFo,
(I
)20108' f o i ns ta nc e
DEPRECI nON
A c co rd in g t o t h s um - of -y ea rs -d ig it s m e th o w it h 1 0- ye a d ep re ci at io n p e o d h e d ep re c a t o n a mo un t a n b oo k v al ue s w il l b e 1~
.(1200-100)=200,
is '(1200-100)
1000,
180,...,DIO
8 2 0 ,. .. ,
20
00
IO
T h s e v a u e a n b e o un d s in g h e a lc u w it h t h f ol lo w in g s eq ue nc e o f k ey st ro ke s D EP R
S ET I
o r d ep re c
SY
w o k sh e
ws
Then, d ep r c ia t o n
ov
MO
Then nd
ye
J ag a
ge
us
wh
we
C ST = a n w e n te r 1 20 0 E NT ER I
Then
ENTER
Then
Th
DE
wh
s;
Then
R BV =
wh
s.
We me m u s b e e nt er ed ) a n s tr ai gh t l in e d ep re ci at io n
ni al co
( sa lv ag e v al ue )
17
LOA
A M O RT IZ A TI O
Fo oa wi e ve l p ay me n h e a r c a c u o r u nc t o n o r n d n g o u a nd in g b a a n e s n te re s o r p r n c p a p a s in g p ay me n a n nt st or pr nc pa pa a ng e o f p ay me n s . P a a m a r e n e re d fo wi Th IN P V wi me MT wi mp i ll us tr at e h o w e g e t h a m or ti za ti o q ua nt it ie s W e u s E xa mp l 3 . u s a t h es e u nc t o n h om eb uy e b o o w $ 25 0 0 0 b e e pa i o ve r 3 0 y ea r p e o d w it h e ve l m o n h l p ay m en t mo ma Th mi mp mo Th me 250,000
is
~OO75
It
p ay m n t
me
It pr nc pa
2 , 0 1 1 .5 6~ .o o7 5 = 24 8 2 92 .
OB12
pa
Kv360-12+1
PR12
Th pr nc pa
monthly
ep
2,011.56v349= 148.25,and
= K (l -v 36 0- 12 + ) =1 , 8 63 .3 0 T h 12th me h e 2n y ea r h e 13th through 24th p ay m n t n c u s v e .+
+v
1 ,8 68 .2 1 2n 3 +
13
(l
34
+ -
= 1 2 K - (P R 1 3+ P R I4 + ., ,+ P R 2 3+ P R 2 4
2 2 2 70 .4 6
T he s c a c u a t o n c a b e c om p le te d u s n g c a c ul a o r f un c i on s W e f i s t clear th calculator registers. ENTER
36
lli1
7 5 w l2 50 00 0
2 nd I Q U IT I
se
I pv l c PT l p M T I
p ay me n p e o d
1)
18
mu
CP
MT
t o u s t h a m o rt iz at io n f un c ti on s) . To
OB12 u s
h e f o o w n g k ey s r ok es .
1 2n d A M OR T
hi op ns he mo
on
w o k sh e
Ke Th
il
us ng
2 4 8 2 9 2. 01 .
BA
OB12'
Using
il
Using
il
-PR12'
NT 1i3+1i4+",+P23+P24
wi
wh
wo se
mo
wo
we
QU TI
il
).
ENTER
il il
BA me ..
il
h e n eg a v e o ta l a mo un t o f p r n c p a p a second year).
p ay me n
P24)
13to 24 he 3+
il 23 OB12 an
23
P2
OB12
OB24
u l b e o un d
OB24, an
1 13 +1 1 + . + 12 3 12
+ 12 4
- (P R 13 + PR I
1 2 K - (O B 1 2 -0 B 2 4) '
... +PR23+PR24)
19
B ON D V AL V
T IO N A N
A M OR T Z AT IO N
ma h e c a c u a to r b on d w o k sh ee t W e u s E xa mp l 4 .1 (a ) b o n w o rk sh e e f un ct io n s
wi
mi
o f 5 % c on ve rt ib l s em i- an nu al ly . 1 62 .
100v6~5 +100(.05)'~.025
he on
ma ur
va ue 10 he 40
Th
Using
1)
166.48. wi
6 .1 89 0 ENTER
( va lu at io n d at e J un e 1 8 1 99 0
il g iv es u s C P N= , an d w e k e
c ou po n a mo un t o f 1 0 p e y ea r
Using
ne
he pr
110v025 +100(.OS)'~.025
Ke
he
mo ma
Th
We n om i na l a nn ua l y ie l r a
us at
il g iv e u s R D T =, a n d w e k e
r ed em p ti o
d at e 2 0 y ea r
1 0 ENTER 6 .1 81 0 ENTER
a te r J un e 1 8 2 01 0
Using il RV we e de mp t o n a mo un t o f 1 00 )
E NT ER I
Using il g iv e u s A CT , w h we ea r ef e t o a ct ua l d a c ou n o r b on d v a u a i on ) Using
il
gi es
we
ve
et
wi Y, wh Using
il mp
Y)
me
nc
we wo we wa
o up o
ar pa
20
il g iv e u s P R = , a n u s n g C PT l e su l
Using
M u p ly in g b y 1 ,0 00 ,0 0 g iv e bond.
he pr ce or
To
11
ng
he ma
1 62 .7 6 n ea re s
mo 1 00 ,0 00 ,0 0 a c a mo un t
il
we
01
we ea
R V= , n d
il
T h e r e u lt in g d is pl a
we h ou l b e 1 66 .4 8
We g eb r
o lu t o n
j(2)
o r h e y i d - o -m a u r
mo
OOv~o
w o k sh e
ol ow
S DT = 1 8 1 9 n t 6 .1 89 0 C PN = RD =6 V= AC Y LD = 2N b yp a se
5a:wJj'
P R = 15 0
il ;(2)
e v er y 6 -m o n th s )
T h p re v o u c a f un ct io n a s f ol lo w s NI
al
EN ER
ne us
QU TI
e n u re s y ie l p e o d a n c ou po n p e o d a r
h e a me )
( 4 6 -m o n t p e ri od s) , wl
mi MT
10
+/
C PT l p v
FV
me ma ur h ou l
e su l
va ue 1 62 .7 6
mo
nn
21
F o h e b on d w i
1+
YI Th
s ho u
ma ur
a mo un t 1 1 w e d o h e o l o w n g
p MT I
e su l
+ / F V c PT l p v
1 66 .4 8
To
we
wi
MT Th
s ho ul d r es u
Vl PT
YI
5 .7 6 h e n om in a a nn ua l y ie ld )
Bond Amortization
T h b on d a mo r z a o n c om po ne n mo wo mu amortization. ma ma th 5t c ou po n
on
1000vI~6
Th
c a b e o un d u s n g h e c a c u a to r me wa
ma mo
d) Th 1000(.05)
a151.o6
902.88.
c a b e f ou n u s n g h e o l o w in g k ey s r ok es .
1 2n d l P Y l
I EN T ER II Zn dI IQ U IT !
ZOll
YI 50 1+
Th
A MO RT I
Th
pMT OOO
1+
F V c PT l p v
PI
Ke
P2 =,
NT RI
E NT ER I 5t coupon.
Then il U s n g h e il p r n c p a r ep a NT th
wa 3. wh
payment.
RN wh h e 5t p ay me n h e m ou n o f w r
il
Us mo
up
3 .9 4
nc
ga
ve
Bo
Pr
Yi
Th an
Be we
Co Do Da
mp
wo
m e o n o r e tw e
We us Ex mp
ou on da s.
4.
us at he va ua on of o n b e w e c ou po n mo wi a n c ou po n a y b l s em i a n u a T h b o m a u r o n u n 1 8 2 01 0 Au mi mp mi E xa mp l 4 . 1 38 .6 0 T h c a b e o un d u s n g h e o l o w n g k e s t o ke s i n t h b on d w o rk sh ee t SDT=8-01-200 (enter 8.0100) C P N = 10 , R D T =6 -1 8- 20 1 ( en te r 6 .1 81 0) , R V =1 00 , A C T
Y LD =
E NT ER I m u
A t P R1 = u s C PT I a l u la t h e p r e . T h d is p a y h o ea 13 60 No ha Th AI=.
qu ed mo
ce wh ch
c om p ut e t h y ie ld .
me
ma
wa
me Wh we p ay m n t a nn u w i o r w i h ou t b a o o p ay m n t he me of a nn u p ay m en t w e c a e n e r v a u e n t h e v a a b e s
as
i nt er es t r at e w h ic h s at is fi e t h r el at io ns hi p
vi
The internalrate of return s)
PM!
a;
23
We ca us
h e c a h f o w w o k sh ee t ( l C F I )
me
CFo,
s uc ce ss iv e p er io d s C O 1 ,CO2,. .. C24. O nc e h e c a c u a t a n n te rn a r a
o f e tu rn . I t i s s o u t o n C0
mo n eg a i v ( a a m ou n p a
c a h f o w a mo un t a r h e r e a t o ns h
C2
mo
o ut )
C a lc u a t n e I nt er na l R a t o f R e tu r
We im
wa Ex mp m e as ur e 6 -m o n
i n e rv a s :
Ex mp
wi
un ws wh
3= Th
w o k sh e
CF 12
CL
T h o l o w n g e r e s o f k ey s o ke s o lv e o r h e n te rn a w he re ) w i b e h e 6 -m on t n te rn a a t o f e tu rn : Ke Ke
n lC F
h e d i p la y h ou l
10
ENTER
ENTER 29
Ke
7 98 2
Ke Th
RR PT Th di t h 6 -m o nt h i n e rn a r a
III, h e d i p la y s ho u r ea d C O = , C0 =,
ENTER
di
ho
ENTER 6. o f r e u rn . ws
f o o w in g r es u s :
a t o f e tu rn )
e a C Fo =
di
Ke
W O RK I
C0 =,
24
1 , C]
RR
%. Th
ma
wo
%.
5. (c %,
ma
%.
C a c u a t n e N e P re se n V a lu e T h c a c u a to r N Pv l wo wi
We
u nc t o n c a b e u se d
Ex mp p re se n v a u e
me
a lc u a t
h e p r s en t v a u e
Su o f h e h re e a sh f o w
o=
we
C2= %.
2.3v] -1.33vl
We th I C F I
C]=
wo
mm wh
wi
We
wo = 0. W e
NP h e a sh f o w v a u e a t nt
NP
rn ICPTI.
ENTER
st at of 0% pe pe od
wo mo ma ma mu me a mo un t m a d a t s uc ce ss iv e p o n t m e) .
CI
ws
me
25
We mo
me
we
mo
mu me f o o w in g k ey s o ke s g iv e u s t h a cc um u la te d v a u e
[Q
ENTER
me
[I
ENTER C0
%,
me
ENTER
ma
me
F0
ENTER
mo
ENTER
periods).
Th p ay m en t o n m o nt h b e o r Wi
NP
1 ,3 56 .4 7 s t
Ke
QU TI
he
Th s t p ay m en t
d i p la ye d K e R]
pv
Nl PT FV
T h h ou l e su l h e d i p la y F V 1 ,7 22 .3 6 T h h e a c u mu la t v al u o f h e s e i e o f2 4 p ay m en t a t m e o f h e n a p ay m en t ma
lOth
a f e r h e 14th w i
wa
mo
i. S up po s
We wi
We wi
mo
h e e qu a i o Ol
wh ws C 02 = 7 5
F 02 =1 4
a n w ho s
f ur th e
5 0s iO l
75aI4li'
75vlOaI4l i'
we wi
me
o ta l n i a l p re se n v a u e
nd C FO =O .
26
We us
h e o l o w n g k ey s
[g
ENTER
[]
751+/-1 ENTER il
ke
50 ENTER
[]
10 ENTER
14IENTERIIIRRllcPTI.
T h d i p la y s ho ul d e a IR
6.518.
[]
27
(FORMERLYCOURSE2 COMPOU NDNTEREST)
L::.
00
#3
At a nn u e s h av e
An ui
Va
on
i,
wi
0"
p re s n t v a u e o f
2 0 y ea r a nn u y - m m ed ia t w i 3 0 y ea r a nn u y - m m ed ia t w i p e y ea r o r h e n a 1 0 y e
n nu a p ay me n o f 5 5 a nn ua l p ay m n t h a p ay s 3 0 p e 0ye
Calculate A) SOLUTION
T h s e e s o f c as h o w s e p e se n n g h e d i f e e nc e b e w e e ( i a n ( i i s me 5we 5we me ma o un d u s n g h e R R u nc t o n
e qu a
E NT ER ! il
Ke
E NT ER ! il
ol ow ENTER
il
+ / ENTER il 10 IENTERI, RR
PT
Th
ul
RR
Th k ey s o ke s g iv e u s h e v a u e o f 1 2n d Q U IT I1 2n d C L R 20 l i 7 .1 77 !w l
lY an
T VM I
5 51 + l lp M T c PT l p vl .
T h d is pl a s ho ul d r ea d 5 74 .7 4 A n sw e r
IY
Th
wi
28
l.::t
2 00 3 # 8 A nn u
Va ua on
or 40 Th ou i nt er es t r at e o f i. T h mu ye wh me e n o f 2 0 y ea r C a c u a t
mo nt um
) 5
) 5
ye
of 1 00 si O
a ls o E xe rc is e 2.2.2)
T hi s
he mo
nu
nt
) 5
SOLUTION
We de ye
od
j. T he n h e a cc um u a te d v a u e a t
1 0 4 -y ea r p er io ds , w i
10th d ep o
v al ua t o n
T h a cc um u a te d v a u e a t
100s51r 100SiOlj
OOs51j'
100SiOlj
100s51j
mu
va
me
Vj)'
me O. We
RR un ENTER
il
40
1+
mu d}
ENTER
il 100 ENTER il ill5IENTERIIIRRllcPTI.
T h d i p la y h ou l e a R R 31.95. Th ye .3195. T he n w e a pp l h e f o o w in g k ey s r ok es . 1 2n d[ IQ U IT I1 2n d I CL R
TVMI
12nd[IBGNI12ndIISETI12ndIIQUIT/ N[ 0I MT Th di
V[ 4.
An we
we ol ws ENTER
29
'-='
2 00 3 # 2 ( D ec re as in g A n nU i ty ~ Fu
%. At
(Exercise 2.3.13)
wh
d ep le te d T h a nn ua l w i h dr aw a l o f n te re s a n p r n c p a a r d ep os i e d n t F un d wh %. De mi a cc um u la te d v a u e o f F un d ) 1
) 1
) 2
E ) 2 43 1
) 2
SOLUTION
T h 1 0 d ep os i
F un d Yare 160 154 148,... 112 106 hf ws
Th NP
CF wo
wi An we
November 2001,#16(Increasinf AnnUi~~ Ol
(Exercise2.3.12) Ol
wi
m on t h e a f e r h e a ym e n c e as e b y 2 . T h n om i a l n te re s 9% convertibl quarterly Calculat
at
) 2 SOLUTION
W i t m o nt hl y r at e} , We keystrokes.
2(Ia)601J'
1 + )3
mo Th me
(Ia)601i
1 .0 22 5 a n t he re fo re , wi
MJ ENTER
T hi s r es u Then
CNI
MT h e d is p a y e ad in g P V .007444
e su l
E NT ER I1 2n d Q U IT I 10.1587.
2 ,7 2 o n h e d is p y . A n w e
30
Lo
e~
ws p ay me n
of
%.
mi
ma D e m in e h e b a n c o f h e o an .
h e s in k n g u n
m m ed i
a f e r e pa ym en t E) 23
SOLUTION
bo
se
ws Cl a n p ay m n t m od e NI
PT
Th
E ND . A pp l
ar h e o l o w n g k ey s o ke s
MT Th
f ou n a s f ol lo w s NI
P MT I O !P V C PT I F V
T h d is p a y e ad s 1 ,2 13 .4 2 Af
he pr nc pa An we
o a a mo un t o f 1 ,0 0
pa d, 21
ef
h e s in k n g
