Practical Applications for Your Financial Calculator

The need for this book has been long apparent from the face of anxiety that accompanies a financial calculator. Students who wear this face are typically learning to use the many functions of a financial calculator for the first time to prepare for professional exams. Unfortunately, students can display a surprising lack of proficiency just weeks before an exam. Perhaps they have procrastinated or maybe they took a calculator class at the beginning of their studies and have forgotten the basics by the time the exam rolled around. In either case, it has become a crippling defect in their exam preparation. Their focus is on the calculator, diverting attention from study, wasting precious time, and preventing them from connecting their knowledge with the techniques of the calculator. In the construction of this book, the aim has been to strike a balance between the academic concepts of time value of money and the technical aspects of a calculator manual, to produce a book and course that is user-friendly and relevant to students needs. We sought to use language students can understand so the lessons lead to practical applications students will face on exams and in their professional lives. In other words, we wanted to create the book we wish we had been handed when we purchased a calculator. The book can be used as a stand-alone calculator study guide or in conjunction with the curriculum of a Certificate Program or University Degree. It follows the same format as the two online calculator classes that Keir Educational Resources offers: The Basic Financial Calculator Class and the Formulas Class. Each of the four calculators that the book covers HP 10bII, HP 12c; TI BAII Plus, and HP 17bII+ has its own section, so there is no need for the student to flip back and forth to find the pertinent information. The keystrokes are typed in bold key fonts so there is no need to squint to see if there was a comma separator or not. The language is straight forward. When technical terms need to be explained, they are done simply and translated into words that the instructor or other students are likely to use. Each individual calculator section is broken into 4 chapters: 1 Intro: The Basics; 2 Time Value of Money; 3 CFP® Formulas and CH. 4 Investment Calculations. The introductory chapter covers the basics of the calculator. Some items are very elementary, such as turning the calculator on and off or changing the batteries. Others are simple but invaluable, for example, introducing the student to the most important keys and their functions or clearing the calculator. We also explain some of those seemingly inexplicable things that happen to your calculator (Where did that comma come from?) and how to correct it, and in the worst case scenario, how to reset the calculator. Chapter 2 teaches the basics of Time Value of Money and how to use the calculator to solve for each of the variables. We work straight across the keyboard. And the sections are marked very simply (Solving for N; Solving for PV). There is no question as to where the student has to go for the information. We work through each variable with problems that are based upon annualized returns and then more frequent compounding. We apply those lessons to some of the more complex TVM problems the student will encounter. Chapter 3 covers all of the formulas that are currently found on the CFP® Certification Examination. We explain not only what the symbols mean, but their use and the investment concepts they are used for. We demystify the formula sheet and make it accessible. Chapter 4 then uses the formulas and shows the necessary keystrokes associated with them in the context of investment planning. We also cover formulas commonly found on exams but not included on the formula sheet.