Financial Consultant for Palm Pilot

v 2.0
Operational Overview for TestDrive kit
Welcome
Welcome to the Financial Consultant calculator for Palm Pilot devices. This calculator has been
designed specifically for real estate, retailing and business professionals who need to use their
Palm Pilot to make fundamental financial decisions quickly and accurately. We are confident
that this software package will provide you with a rich problem solving environment that is
unparalleled in its ease of use, power and flexibility.
We especially welcome your feedback so if there are new features that you would like us to
consider or just general comments please feel free to contact us at the address detailed at the end
of this document.
A note about this users guide
This guide has been provided for the convenience test drive version users and provides a succinct
operational overview of the Financial Consultant. A greatly expanded bound edition of the
Financial Consultant 2.0 guide is included with the full product
Important Disclaimer
A considerable amount of effort has been made to ensure that this product provides you with
dependable answers and years of trouble free operation. However, LandWare, Inc. makes no
warranty of any kind with regard to this software and keystrokes contained within this manual
and shall not be liable for any consequential, incidental or indirect damages incurred through the
use of this software.
Copyright and Distribution Notice
Please remember that the Financial Consultant is a commercial product and is protected by strict
copyright laws. Any unauthorized distribution is illegal.This manual and the software described
in it are copyrighted with all rights reserved. No part of this publication may be reproduced,
transmitted, transcribed, stored in a retrieval system, or translated into any language in any form
by any means without the written permission of LandWare, Inc.
Installing the Financial Consultant
Use the Installer application that came with your PalmPilot HotSync software to install the
finCALCTD.prc file. If you require further guidance than please consult your original Financial
Consultant users guide or call LandWare support at 201 2617944.
The Display
The display shows input data, interim results and answers to calculations. It contains a row of 30
characters for displaying the X registers, error messages and a row of status annunciators.
Annunciators
The display contains six annunciators that relay the status of the calculator during various
operations. The annunciators are active buttons so they can be tapped to alter their settings.
BEG Payments are at period start (ordinary annuity) for compound interest calculations. Tap to
set END mode.
END Payments are at period end (annuity due) for compound interest calculations. Tap to set
BEG mode.
360 The calculator is set to 360 day (30 day month) calendar.
365 The calculator is set to 365 day calendar. Leap years are ignored.
ACT Actual calendar is used. Leap years are taken into account.
DMY Dates are input and displayed in DD.MMYYYY form.
MDY Dates are input and displayed in MM.DDYYYY from.
1YR Payments are made Annually.
2YR Payment are made Bi-annually.
QTR Payments are made quarterly.
MTH Payments are made monthly.
WK Payments are made weekly.
DLY Payments are made daily (using the year length setting.)
Error messages
Any attempt to execute a calculation with an erroneous parameter (such as dividing by zero) will
be trapped by the calculator and displayed on screen. You can clear error messages by pressing
any key and then resume calculations.
Division by 0 An attempt to divide by 0 has been made.
Expr too complex Attempt to use more than ten pending operations or levels of
parentheses. Algebraic mode only.
Illegal Parameter Attempt to perform a math operation with improper input eg log(0),
sqroot (-1) etc.
Invalid Date The number entered cannot be interpreted as a valid date. Check its format.
Invalid Interest Attempt to execute a TVM function with an illegal value stored in i/YR.
Invalid PaymentAttempt to execute a TVM function with an illegal value stored in PMT.
Invalid PeriodAttempt to execute a TVM function with an illegal value stored in n
Invalid RangeAttempt to execute an Amrt function with illegal payment range specified.
No SolutionNo solution is possible using the current values stored in the TVM registers.
Out of RangeThe magnitude of the result has fallen outside the calculators operating range.
Statistics RegistersAttempt to perform a statistics function with an invalid number of data
points. Check the contents of Register 9.
Display Formats
You can control the way numbers are displayed without altering their internal full precision
representation. The following formats can be selected via the Preferences button .

Floating Numbers are displayed using a floating decimal point.
Fixed (FIX) Displayed numbers are rounded to n decimal places.
Scientific (SCI) Numbers are displayed with one digit before the radix mark and multiplied
by a power of 10.
Engineering (ENG) Numbers are displayed in the same format as SCI but with an exponent
that is a multiple of three.
In Fixed, Scientific and Engineering modes the number of decimals displayed can also be set by
the user.
Operational settings
Operational settings can be altered in two ways:
1. Tapping the annunciator icon in the calculators display.
2. Via the Prefs window.
The following operational parameters can be specified to customize the way the Financial
Consultant works.
Payment Mode-Tap the BEG/END annunciator to toggle between payment modes.
Payment Frequency-The number of payments made each year can be specified using the
Payments are made popup menu in the Preferences window or by tapping the 1/YR, 2/YR, QTR,
MTH, WK, DLY annunciator.
Compounding Frequency-The interest compounding frequency can be specified using the
Interest compounded popup menu in the Preferences window. Special attention should be given
to this setting as it will effect all TVM answers. For the majority of circumstances it should be
set to "With payments".
Year length-Tap the ACT/360/365 annunciator to set the year length to ACTUAL, 360 day or
365 days. This setting effects the CAL and Simple interest functions.
Date Format-Tap the DMY/MDY annunciator to specify how dates are entered and displayed.
MDY as MM.DDYYYY, DMY as DD.MMYYYY This setting effects the CAL and Simple
interest functions.
Input Logic- Choose between Algebraic without precedence(eg 2+3x4=20) or Algebraic with
precedence(eg 2+3x4=14)
Display Modes- Choose between the following display formats: Engineering, Scientific Floating,
Fixed.
Date Calculations
The CAL Calendar function allows you to calculate:
1. The number of days between two given dates.
2. A future or past date.
3. The Day of Week for any date.
Date Entry modes
Use the Date Format Preference to set the date input and display format. 1st December 1964 can
be entered and displayed as:
1.121964 (DMY Mode) or
12.011964 (MDY Mode)
Year Length Setting
Use the Year length annunciator to set the year length assumed by the CAL and INT > Simple
Interest functions. Choose between:
ACT - Actual days. Leap years are taken into account.
360 - Using the 360 day (30 day month) calendar.
360 - Using the 365 day calendar. Leap years are ignored.
To perform date calculations:
1. Tap the CAL button. (Todays date is automatically entered)
2. Enter two of the following: First Date, Second Date, or Days between dates.
3. Tap the button corresponding to the unknown third variable.
4. Tap Exit to close the form.
Examples
Calculating a future date- If you purchased an apartment with an 120 day option on 14th May
1981 what would be the expiration date (assuming 360 DMY modes).
Keystrokes
CAL 14.051981
Tap First date
120 Tap Days between dates
Tap Second date
Days between dates- Calculate the number of days between June 3, 1983 and October 15,1984
(assuming 360 MDY modes).
Keystrokes
CAL 6.031983
Tap First date
10.151984
Tap Second date
Tap Days between dates
Math operations
In addition to the 12 scientific functions provided in the SCI menu, several other important math
related operations are supported. These are discussed below.
Exchanging parameters
The contents of the X and Y registers can be exchanged by using the x<>y key. This operation
can be very useful for:
Obtaining the second result of a function that returns two values (eg Mean.)
Reversing the order of two operands in a two parameter function (eg y^x)
Reversing the order of two operands in a non commutative function (eg division.)
Exponents
Use the SCI > EEX function to enter numbers in exponent form.
To enter an exponent:
Key in the mantissa portion
Select SCI > EEX
Key in the exponent portion
Order of operations
When operating in Algebraic mode the following operator precedence is observed
1. Functions.
2. Multiplication, Division.
3. Addition, Subtraction.
Operators with equal precedence are performed left to right. The observation of operator
precedence can be disabled if required by unchecking the with precedence option in the Prefs
window.
Using parentheses
The ( ) parentheses buttons can also be used to control the order in which an expression is
evaluated. The portion of the expression enclosed in parentheses is evaluated first.
Examples
Calculating x!- Calculate 3!
Keystrokes
3 SCI > x!
Universal powers- Calculate 3 raised to the power of 4
Keystrokes (algebraic mode)
3 SCI > y^x 4 =
Using Parenthesis- Calculate 3 x (2+4)
Keystrokes (algebraic mode)
3 x (2 + 4 ) =
Using Memory Registers
Ten general purpose and five financial registers (n, PV, PMT, FV, i/YR) are provided. The
general purpose registers can be used to set aside numbers as constants for use in later
calculations. A special Tax rate memory is also provided for use by the Nett and Gross price
functions.
Important note
Registers 4 through 9 are also used by the statistics functions and will be altered if the CLR >
Statistics registers and x> Input data functions are used.
Storing Numbers
The MEM > Store function followed by a digit 0 to 9 will copy the contents of the display into
the memory register specified by the digit.
Recalling Numbers
The MEM > Recall function followed by a digit 0 to 9 will copy the contents of the register the
memory register specified by the digit into the display. The MEM > Recall functions can also be
used to recall the contents of the finance registers (n, i/YR, PV, PMT, FV).
Examples
Storing a number- Store 45 into register 8
Keystrokes
45 MEM > Store 8
Percentage Calculations
The following Percentage calculations are supported:
Percentage fraction.
Add-ons and Discounts.
Percentage change.
Percent of total.
Cost/Selling Price Markups.
Cost/Selling Price Margins.
Nett and Gross Price.
Percentage fraction
To find 45% of 55
Keystrokes
55 x 45 % =
Add-ons and Discount
To increase 34 by 22%:
Keystrokes
34 + 22 % =
To decrease 78 by 43%
Keystrokes
78 - 43 % =
Percentage change
Percentage change is expressed as a percentage of the Old Value.
1. Tap > % Change.
2. Enter two of the following: Old Value, New value, or Percent Change.
3. Tap the button corresponding to the unknown variable.
Performing Percent of total
Percent of total is expressed as a percentage of the Total amount.
1. Tap > % of Total.
2. Enter two of the following: Total amount, Part of total, or Percent of total.
3. Tap the button corresponding to the unknown variable.
Cost/Selling Price with Markups
Markups are expressed as a percentage of the Cost price.
1. Tap > Markup
2. Enter two of the following: Cost Price, Selling Price, Markup (as a whole %).
3. Tap the button corresponding to the unknown variable.
Cost/Selling Price with Margins
Margins are expressed as a percentage of the Selling price.
1. Tap > Margin.
2. Enter two of the following: Cost Price, Selling Price, Margin (as a whole %).
3.Tap the button corresponding to the unknown variable.
Nett and Gross Price
A single tap mechanism is provided for calculating before and after TAX amounts.
To store a TAX rate for future use:
1. Enter the tax rate as a whole number (eg 30% = 30.0)
2. Tap MEM > Set TAX rate.
To calculate a Nett amount:
1. Enter the Gross figure.
2. Tap > Before TAX
To calculate a Gross amount:
1. Enter the Nett figure
2. Tap > After TAX
Examples
Percent Change- Calculate what % of increase changes 23 to 67.
Keystrokes
> % Change
23 and tap Old Value
67 and tap New Value
Tap Percent Change
Retail Margin- You purchase Guitars for $225 and sell them for $300, what is the margin as a
percentage of cost price.
Keystrokes
> Margin
225 and tap Cost price
300 and tap Sell Price
Tap Margin
Selling Price- Your standard markup is 60%. If you buy software for $55, what is the retail
price.
Keystrokes
> Markup
60 and tap Markup
55 and tap Cost price
Tap Sell Price
Calculating post tax amounts- What is the total cost of a $340 garment including Sales tax.
NOTE: You must first set up the TAX register with the current TAX amount before using the
After TAX and Before Tax functions.
Keystrokes
340 > After TAX
Interest calculations
The Financial Consultant supports the following interest calculations:
Simple Interest.
Compound Interest.
Conversions between Nominal and Effective interest rates.
Simple Interest
Simple interest on a Loan is expressed as a percentage of the Principal Value (PV) and is repaid
in a lump sum. Use the INT > Simple Interest function to calculate simple interest owing.
To calculate Simple Interest
Enter the interest rate
Tap i/YR
Enter the loan amount
Tap PV
Enter the loan period (in days)
Select INT > Simple Interest
The amount of accrued interest is calculated according to the current year length setting.
Compound Interest
Compound interest calculations take into account that interest added to the principle at specified
compounding periods also accumulate interest. (ie savings accounts mortgage, leases etc). The
i/YR function can be used to calculate the Compound Interest rate.
To calculate the Interest rate
Verify the Payment Frequency.
Verify the Interest Compounding Frequency.
Verify the Payment mode.
Enter values for the known PV, FV, n, PMT values.
Tap the i/YR button.
See the Savings, Loans and Mortgages section for further details.
Nominal Effective interest rates
Interest rates are normally expressed as nominal interest rates. A nominal interest rate is an
annual rate that is compounded periodically (ie 12% per annum compounded monthly). When
investments have different compounding periods (ie monthly vs quarterly) then effective interest
rates are used to compare them. (eg 18% pa compounded monthly is equivalent to earning
19.56% pa compounded annually.)
The INT > Interest Conv function allows you to convert between nominal and effective interest
rates using two possible compounding methods:
Periodic compounding (ie monthly, quarterly, yearly).
Continuous compounding.
Performing Interest conversions
Tap INT > Interest Conv
Enter the known Nominal or Effective interest rate.
Tap the corresponding button to enter the value.
Enter the number of compounding periods per year. Enter 0 to specify "continuous"
compounding.
Tap Compounding Periods.
Tap the button corresponding to the desired rate.
Examples
Annual yield from a loan- Find the rate of return on $1000 compounded monthly if it amounts
to 1500 in 5 years.
Keystrokes
CLR > Finance Registers
1000 +/- PV
1500 FV
5 n > Enter Term (years)
i/YR (returns 8.14)
Comparing lender rates- Which if the two following banks offer the best interest rate?ASB
Bank: 6.7% annual interest, compounded quarterlyBNZ Bank: 6.65% annual interest,
compounded continuously
Keystrokes
CLR > Finance Registers
INT > Interest Conv...
6.7 Tap Nominal Annual Rate
4 Tap Compounding periods
Tap Effective Annual rate
6.65 Tap Nominal Annual Rate
0 (specifies continuous compounding)
Tap Compounding periods
Tap Effective Annual rate
Statistics
Performing statistical calculations involves two phases. First you enter the data points using
x> Input data . The Financial consultant accumulates intermediate statistics from this data.
Statistical calculations are then performed.
Statistics Registers
The Statistics functions utilize a block of the built-in storage registers to hold the intermediate
statistics accumulated from your input data. Registers 4 to 9 are used for storing the following:
R4 - Summation of x
R5 - Summation of x2
R6 - Summation of y
R7 - Summation of y2
R8 - Summation of xy
R9 - # data points
Entering data points
Both single and two variable data points can be analyzed. It is very important to execute the CLR
> Statistics Registers function before entering new data.
To enter data:
1. x> Enter data.
2. Enter the y value and tap Set y value(if applicable.)
3. Enter the x value.
4. Tap Enter Data Point.
Correcting data points
To correct the entry of an erroneous data point.
1. x > Enter data.
2. Enter the incorrect y value and tap Set y value(if applicable.)
3. Enter the incorrect x value.
4. Tap Remove Data Point.
Calculating the Mean
The mean is the arithmetic average of the data summed. The x > Mean function will return the
mean of x to the display. Tap to view the mean of the y values.
Standard Deviation
A data set's Standard Deviation is a measure of its dispersion around the mean. The x > Std
Dev function will return the SD of x to the display. Tap to view the SD of the y values.
Total
The x > Total function will return the summation of the x values to the display. Tap to view
the total of the y values.
Correlation
The x > Correlation function will return the correlation coefficient for the current data set.
Examples
Average Rainfall-Monthly Rainfall data is as follows: 34, 38, 44. Calculate the Average
Keystrokes
CLR > Statistics Registers
x > Input Data
34Tap Enter Data Point
38Tap Enter Data Point
44Tap Enter Data Point
Tap Exit
x > Mean
Savings, Loans and Mortgages
The Time Value of Money (TVM) functions (n, i/YR, PV, PMT, FV) solve problems that
involve money earning compound interest over time. Use the TVM functions when the following
conditions are true:
Payment amount is constant.
Payments at regular intervals.
Use the Discounted Cash Flows (DCF) functions for problems that involve uneven cash flows.
Cashflow sign conventions
It is important to keep in mind when entering and viewing results that:
Money paid out is expressed as a negative number.
Money paid in is expressed as a positive number.
The sign is obviously dependent on your perspective. For example if you are a borrower then
payment is negative, for lenders it is a positive value. You can use the +/- key to toggle the sign
of the current number.
Payment Mode
It is important to ensure the payment mode is set correctly for your particular problem. Payments
can be made at the BEGinning (annuity due) or END of the period (ordinary annuity). Mortgage
payments are normally made at the end of the period. See Setting the payment mode for further
details.
i% Compounding Frequency
The i/YR function always specifies interest as an annual rate. Interest can be applied (or
compounded) at varying frequencies. This frequency is specified using the Interest compounded
preferenceWith most cases interest is compounded with payments and it should be set this way.
The Financial Consultant does however provide the flexibility to alter the compounding
frequency for certain scenarios (eg Canadian mortgages.)
Payment Frequency
Use the Payments are made preference to specify the frequency of payments (ie Quarterly,
monthly etc) In most cases payments are made monthly.
Performing TVM calculations
To perform a Time value of money calculation:
1. Verify the Payment Frequency.
2. Verify the Payment mode.
3. Enter values for the four known TVM values.
4. Tap the button corresponding to the unknown value.
Examples
Monthly Mortgage Payment-You take out a 25 year, $180,000 dollar mortgage at an annual rate
of 13.5%. Calculate the monthly payment.
Keystrokes
CLR > Finance Registers
13.5 i/YR
25 n > Enter Term
180000 PV
PMT (returns -2098.16)
Payment on a Canadian Loan.What is the monthly payment required on a 30 year, $30,000
Canadian mortgage with an interest rate of 12%
Firstly ensure the Finance settings are set to the following:
Bi-annual Compounding
Monthly payments
Keystrokes
CLR > Finance Registers
12 i/YR
30 n >Enter Term
30000 PVPMT (returns -301.92)
Loan Affordability- You want to pay $175 per month for 24 months on a 9.5% loan. How much
can you borrow?
Keystrokes
CLR > Finance Registers
9.5 i/YR
24 n > Enter Periods
175 +/- PMT
PV (returns $3811.43)
Loan Period Calculation-How many months will it take to repay a $4000 loan if your monthly
payments are $200 and the annual interest rates are %9.5
Keystrokes
CLR > Finance Registers
9.5 i/YR
200 +/- PMT
4000 PV
n > Calculate # Periods (returns 21.86)
Car Lease Payment (with purchase option)- A $35,000 BMW is to be leased for 3 years, with
an option to purchase for $7,500 at the end of the lease. Payments are made at the beginning of
the month with an interest rate of 14%
Keystrokes
CLR > Finance Registers
Set BEG Mode
14 i/YR
3 n >Enter Term
35000 +/- PV
7500 +/- FV
PMT (returns $-1349.31)
Unpaid Balance on a Mortgage- You have taken out a 30 yr $65,000 mortgage at 12.5% annual
interest. You make monthly payments of $700. Calculate the Principal balance remaining after a
year.
Keystrokes
CLR > Finance Registers
12.5 i/YR
30 n > Enter Term
65000 PV
700 +/- PMT
Amrt > Set Range...1 and Tap the First Period button
12 and Tap the Last Period button
Exit (amortization range is now set)
Amrt > Balance (returns $63949.85)
Investment Analysis
The following functions (accessed via the DCF Discounted Cash Flows button) can be used to
analyze investments that involve cash flows (money paid out or received) of uneven amounts
that occur at regular intervals.
IRR: Internal Rate of Return- the interest rate at which the net present value of the cash
flows is 0. For 'conventional' investments the investment is attractive if IRR is positive.
NPV: Net Present Value- the present value of a series of cash flows plus the initial investment
cost, calculated for a specific interest rate.
NFV: Net Future value - the future value of a series of cash flows, calculated using the NPV.
NUS: Net Uniform Series- the amount that is equivalent to the series of cash flows having a
PV equivalent to the NPV.
TOTAL: Sum Total of the cash flows.
Conventional investment:
A conventional investments is considered "attractive" if the IRR% is greater than the cost of the
capital. Such an investment must meet the following criteria:
Initial cash flow is negative.
Some cash flows are positive.
Cash flow sequence changes sign only once.
The sum (TOTAL) of the cash flows is positive.
Performing DCF calculations
1. Verify/set the number of payments per year (usually set to Annual).
2. Verify/set the Annual interest rate using i/YR (not required for IRR)
3. Clear any previously entered cash flow entries using CLR > Cash Flows
4. Enter the cash flow entries as outlined below. Payments you make are negative, money you
receive is positive.
5. Evaluate IRR, NPV, NFV, NUS and TOTAL by selecting them from the DCF popup menu.
Entering the initial cash flow
Tap DCF > Edit CF to open the cash flow editor.
Enter the initial amount. This value must be negative.
Tap the Amount cell in the Init row.
Entering subsequent cash flows
Tap DCF > Edit CF to open the cash flow editor.
Tap the previous CF number and select Insert from the resulting popup menu
Enter the new Amount value and tap the Amount cell in the new row.
Enter the new N value and tap the N cell in the new row
Deleting a cash flow entry
Tap DCF > Edit CF to open the Cash Flow editor.
Tap the previous CF number and select Delete from the resulting popup menu
Examples
Determining effectiveness with NPV- You have the opportunity to buy a $17 million dollar
factory with a useful life of 8 years and a 2.8 million yearly return. You want a return of at least
14% Will this be an worthwhile investment?
Ensure the calculator is set for Annual payments and Interest compounding.
Keystrokes
CLR >Cash Flows
CLR >Finance Registers
14 i/YR
DCF > Edit CF
17 +/-
Tap the Amount cell in the Init row
Tap the Init cell entry and select Insert
2.8
Tap the Amount cell in the newly entered row
8
Tap the N cell in the newly entered row
Exit
DCF > NPV (returns -4.01)
Technical Assistance
We at LandWare committed to providing the owners of the Financial Consultant with ongoing
support. If you require technical assistance or have any questions concerning this product please
contact us via:
Telephone (USA)
voice: 201 261 7944
fax: 201 261 7949
Electronic mail : support@landware.com
Mail : LandWare, Inc.P.O. Box 25 Oradell, NJ 07649, USA
Credits
The Financial Consultant is 1997-1998 LandWare Inc. All rights reserved.
The Financial Consultant and its accompanying documentation was designed and developed by
Clinton Logan. Development was assisted by a Gaggia espresso coffee machine.
LandWare and Software for Terra Firma are trademarks of LandWare Inc. All rights reserved.
All other brands and product names are registered trademarks of their respective holders.